News
13 May 2021
Energy costs can account for a substantial proportion of overheads, which means finding ways to reduce expenditure is important, however, it is critical you are able to manage this carefully.
An energy consultant can help you to understand your expenditure, inform you about market information, and advise you on purchasing strategies and value-for-money energy supply contract options, usually helping to save you money in the long term. The wrap around services offered by some consultants can also ensure you are paying the correct amounts throughout your contract, along with advice and notifications on contractual obligations and legislation which could impact your organisation.
However, in this competitive market not all energy consultants work in the same way or offer the same services. Be wary of any company which guarantees to know what the market is going to do or always reduce your energy prices, as continuous fluctuations in the wholesale energy market make this claim impossible. An energy broker can only help your organisation secure the best available rates from the same market that everyone has access to. In addition, energy consultants can provide value-added services that save you time and hassle in what is otherwise a highly complex industry.
Remember that there is genuinely no magic wand and what you are buying is the experience and expertise of the organisation who should be a credible partner to help you achieve your short, medium, and long-term goals.
1. An overly assertive manner
If you feel that you are being pressured into signing a contract, consider whether you are being hurried into a decision because the consultant has something to hide and wants to get everything finalised before you have a chance to find out what it is. What difference should it make to the adviser if you want to wait, surely this is your choice and your risk?
We understand that some brokers call 10-15 times in one day to pressure people into signing a contract and, in some instances, we know customers have signed contracts costing them £70,000 in additional costs – because they could not bear to be harassed any further.
We have been informed by a customer that a rogue energy consultant drove from Newcastle to Colchester to get a contract signed off which, in this case, cost a college £30,000 in additional charges that they were unaware of. Thankfully, in this instance (which is very rare) the college successfully contested it, but this highlights the lengths some rogue brokers will go to for financial gain.
2. Verbal contracts
We do not recommend entering into a verbal agreement with an energy consultant. You should always have a clear written illustration of the rates, supplier options and terms and conditions of any contract you are signing and there is no good reason this process should ever be circumnavigated.
3. A dubious online presence
Online reviews aren’t always what they seem and fake testimonies can be added to mask complaints from genuine clients. It is always worth digging a little deeper to gain a full insight on the company you are considering working with and we recommend talking to other industry professionals for their “live opinions”. Unfortunately, in the digital world we have seen examples of companies starting to exploit this channel. However, as a professional consultancy and not a consumer organisation the genuine integrity of a business is showcased in different ways.
4. A lack of transparency and information
It is essential to have a clear understanding of the terms and conditions of any contract you are entering into; always ask for a full breakdown of all applicable prices that are going to impact your budgets and do not simply rely on analysis provided by the provider without being able to see that each component compares with your expectations. Using different consumption figures, missing out compulsory charges or levies, known as pass through, or even forecasting that is not in line with your historical budget totals are all actual examples to be aware of here.
5. Fraudulent activity
Phone calls purporting to be from a supplier are also used as an underhand tactic to pressure the customer and hurry them into signing a contract. These phone calls could falsely claim that the client will incur out-of-contract charges, or expensive tariffs if they do not sign the contract within a certain timeframe. We had a couple of situations ourselves where rogue energy brokers were calling our customers pretending to be Zenergi! Always ask for an e-mail and check the domain is correct if you are at all unsure.
We have known cases where details of authority letters / contracts have been changed after it had been signed. This could result in the customer being tied into a longer contract than they agreed to, amongst other attempts which make it difficult to exit the contract.
We focus on complete transparency to put the customer at ease, guaranteeing the contract they sign is the contract they get.
It is worth noting here that no independent energy consultant will be owned or working on behalf of a supplier, so don’t be fooled when these people have the audacity to impersonate others.
6. Claims that services are free
Energy brokers, or anyone for that matter, generally do not work for free and any which claim to do so should be questioned. It is likely they are recovering fees which are above an acceptable rate and this is often in the form of signing clients up to a higher unit rate and claiming undisclosed commission.
At Zenergi we are always happy to offer a fixed fee proposal or inclusive commission, but we would never misrepresent the value we provide by trying to tell you it’s free.
7. Comparing apples with pears
It is not uncommon for an inferior supply product to be promoted by some consultants, whereby unit rates are “broken down” and only some elements of the proposal used. When compared with other proposals, which may have fully inclusive prices, they appear significantly cheaper than those of their competitors. If there is a significant difference in proposed costs then something is not right.
Please remember, everyone purchases from the same wholesale market and whilst the difference in people’s business models or purchasing power (Zenergi purchases over £290 million of energy for our customers) can help improve the costs by 1% or 2%, the marginal consultancy fee (often a few hundred pounds per meter) is the main variable. So there is no way two genuine credible proposals on a like-for-like service comparison will be more than 10% different.
Brokers that earn a fee based on a shared savings system can also mislead potential customers by not comparing fairly. We have seen examples where the broker has used a supplier renewal price as the basis of comparison or baseline; this price is typically inflated and can, more often than not, be easily beaten by live market prices. By doing so, this would allow brokers to secure a much larger share of any savings achieved, compared to the correct standard rate.
8. A lack of notice prior to your renewal
At Zenergi we will always inform our customers that their contract is nearing renewal a minimum of 3 – 6 months in advance. This gives the client every opportunity to explore the market and consider other options, rather than feel obliged to make a hurried decision to avoid rolling into out of contract rates.
We often hear of brokers giving only a few weeks’ notice which can pressure the customer into renewing with them, or worse, no notice period at all and an automatic renewal.
If you are still unsure whether you are dealing with a reputable organisation, below are eight questions to help determine whether a particular energy consultancy is the right choice for your organisation.
1. How do you charge for your service?
One of Zenergi’s core values is to be open and transparent at all times.
When Zenergi provides a price for an energy contract, we provide a fixed fee proposal or an inclusive ‘uplift’ that is our fee for the specific services you require.
In simple terms, if your energy unit rate would be 10p with your chosen supplier and our fee was 0.05p/kwh then the price you pay on your bill would be 10.05p/kwh. Your energy supplier collects this from you when you pay your bills and we claim it back from your supplier, so there is nothing that anyone should be trying to hide from you or unable to disclose.
So that you understand the value we deliver, we will always be happy to provide a breakdown of how you have paid us, and the services you have received in return.
2. What makes your service the best option?
Zenergi has a long-standing and well-known reputation in numerous sectors across the UK. The Zenergi group has an impressive heritage and enduring experience providing world class customer service and a team of incredibly experienced energy consultants whose relationships with clients are built on trust and confidence.
We are happy to provide any genuine references on request.
3. Do you offer a bespoke service that is specific to my needs?
To ensure we offer a specific, bespoke service to our clients we always determine a client’s energy needs prior to working together. Needs can vary depending on industry and energy usage, the complexity of the portfolio; the level of service and support needed; and the budget.
The most common services our customers purchase are energy or utility procurement, bill validation and access to our positive energy portal and contract and supplier management. We create an individual contract for each customer and do not expect you to sign onto a framework or one-size-fits-all agreement that doesn’t completely meet your needs. Each element of these services can be tailored to suit our customers’ needs and address different objectives – from saving money through to saving time and administration within your organisation.
4. What type of contracts are you able to offer?
We can offer a full range of contracts dependent on our clients’ needs, including flexible procurement and fixed strategies. We work with the widest range of suppliers and are able to offer a variety of options depending on future forecasts, energy consumption and risk appetite, as well as those all important common objectives we agree to deliver together.
5. How will you understand my energy usage?
Understanding our clients’ energy profile ensures we give genuine advice and guidance. We establish an on-going relationship, which requires an understanding of how our clients are using energy now, including operational behaviours, along with future plans.
Our customers benefit from an online reporting tool which allows us to monitor very closely customer consumption trends. We talk with our customers to help gain mutual understanding and insights that empower them to observe, investigate and ultimately reduce their energy use and expenditure.
It is our job to notify you of things to be aware of, however, we must work effectively together to act on the opportunities this presents to achieve objectives.
6. Are you independent and how many suppliers do you work with?
We are an independent, privately owned energy service provider. We work with one of the widest selections of energy suppliers in the UK, over 15 in total.
We have come across unscrupulous brokers that use a small sample size of two or three suppliers guaranteed to give them the highest levels of commission, which means customers don’t get the visibility of the options they need.
We will always provide a clear written comparison which identifies the suppliers on offer and standardised pricing comparisons. In addition, our dedicated energy consultants will always take the time to talk through the options so that they are fully understood. However, we believe it is really important that it should always be your free choice as to which supplier or proposal you select.
7. Are there any value-added services on offer and how will I benefit?
We are proud to offer a full range of additional services that are determined by clients’ individual needs. In addition, our energy consultants establish strong relationships with clients.
Zenergi’s acquisitions over the years have allowed us to expand our level of expertise to provide an unrivalled service which covers every aspect of clients’ energy and compliance needs. Our in-house engineering and technical services team can deliver even the most challenging projects, regardless of their scale, which is why we are trusted by some of the largest organisations in the country to help them meet their environmental and sustainability objectives.
We are committed to taking responsibility for our planet and providing the best support for you to do this too, which means genuinely reducing the costs and environmental impact of your organisation.
Although energy consultancies, also known as Third Party Intermediaries (TPIs), are not regulated, Ofgem has set out voluntary principles at which Zenergi excels.
Honesty
We clearly identify ourselves, our services, and any organisations we represent (directly and indirectly) at the start of any customer interaction, which enables us to ensure the recommendations we make are based on clients’ individual circumstance and situation. We present all prices and clearly detail the options available in a standard format to support easier decision-making.
Respect
We aim to delight our customers and have a strong commitment to respecting our customers’ freedom of choice and wishes. We follow guidelines to comply with customer preferences with regard to communication and marketing and treat everyone in the way we expect to be treated.
Accuracy
We work with one of the widest selection of energy suppliers in the UK to ensure any proposal is representative of the market place. We provide a written comparison which identifies the suppliers on offer and standardised pricing comparisons. In addition, we will go through each of the options with customers to ensure a full understanding of the detailed analysis we conduct on our customers’ behalf.
Transparency
We act with integrity at all times, disclosing our terms and conditions and all the information required to ensure that customers understand their commitment.
Customer-focused
Our Relationship Managers establish strong relationships with clients, who are at the heart of everything we do. Testimonials and a consistently high retention rate reflects our customers’ long standing satisfaction with our services. We operate a case system to resolve any customer issues and we ensure excellent communication in all areas.
Professionalism
All of the team have regular training to remain up-to-date with industry issues and the skills needed to perform their roles to the best of their ability. We are committed to providing a positive environment where people can grow and develop both professionally and personally.
Energy is incredibly complicated, and many consultants focus on hard-hitting sales tactics and then rely on customers losing interest in the billing side of things. These brokers will do their best to try to hide substantial additional charges; and many customers also find themselves with overly complicated invoicing, and a poorer level of service than expected. These companies do not employ true energy specialists that will take the time to understand your needs and guide you through the processes.
There are many examples of customers paying huge amounts unnecessarily. However, one which is particularly pertinent, given the percentage of its relatively small budget, was a small rural primary school in Kent that was forced to compare our costs to those of another broker. The broker promised to save them 21%, whilst Zenergi’s prices were showing a 4% increase (due to rising wholesale markets and non-commodities). However, the broker did not compare prices against the school’s existing prices, and instead made up a massively inflated “renewal price” and hounded the school about needing to act quickly to achieve a 21% saving. Unfortunately, the school did sign up without gaining clarity and when we were shown the school’s new contracted rates, we found that the rates were actually 5 pence per kWh higher than those provided by Zenergi! This cost the small primary school an additional £2,400 per annum whilst also being stuck in the contract for five years, so a very expensive mistake coming in at over £12,000 of wasted public funds, which is so frustrating.
We are here to help. If you would like to hear more about how Zenergi can help secure the best-value energy contract for your organisation and how to benefit from our highly credible service offering then please visit our contact page or email us at bepositive@zenergi.co.uk.
