Business Energy Renewal Letter: What to Check

Short answer

If you are a microbusiness, your supplier has to send a renewal letter, called a Statement of Renewal Terms, about 60 days before your fixed contract ends. It shows your current prices, the new prices on offer, your annual use and what happens if you do nothing. Treat it as a deadline, not a done deal.

Key takeaways

Microbusinesses get a renewal letter about 60 days before the end date.
It must show current and new prices, annual use and what happens if you do nothing.
Microbusinesses can’t be made to give notice of intent to switch.

What the letter is

For microbusinesses, Ofgem rules require suppliers to send a Statement of Renewal Terms before a fixed-term contract ends. It should arrive around 60 days before your end date, and no earlier than 120 days before. Larger businesses usually get a renewal offer too, but the timing and content depend on the contract rather than these rules.

What it must show (microbusinesses)

Your current prices.
The prices of the new fixed-term offer.
Your annual consumption.
The terms that will apply if you don’t agree anything, including any out-of-contract or rollover terms.
A clear statement of what you need to do, and by when, if you don’t want those terms.

What to do when it lands

Find the end date and the deadline. Both should be on the letter. Put them in the diary.
Compare the new rates with your current ones. Look at the unit rate and the standing charge together. A small rise in one can hide a big rise in the other.
Work out the annual cost. Annual kWh × unit rate, plus 365 × standing charge. Do it for the old and new rates.
Check what happens if you do nothing. That is the price you pay for ignoring the letter.
Get other options before you accept. The renewal offer is one price from one supplier.

Do I have to give notice?

If you are a microbusiness, your supplier can’t make you give notice of your intention to switch. Larger businesses should check the contract: some require written notice, and missing it can tie you in.

If you ignore it

You will usually move onto the terms set out in the letter, often out-of-contract rates that are higher than agreed contract rates. You can still act afterwards. See out-of-contract rates.

A quick way to compare

	Current	Renewal offer
Unit rate	From your bill	From the letter
Standing charge	From your bill	From the letter
Annual cost	kWh × rate + 365 × standing charge	Same sum, new rates

Add Climate Change Levy and VAT at the end if you want the full bill figure. See VAT and CCL on business energy.

Renewing with a particular supplier?

Sources

Ofgem: Standard Licence Condition 7A (microbusiness contracts and renewals)
Ofgem: Energy advice for businesses (ofgem.gov.uk)

Questions

My renewal letter came with only a few weeks left. Is that allowed?

For microbusinesses, the letter should arrive around 60 days before the end date. If it came late, keep the envelope or email date and raise it with the supplier.

Is the renewal price negotiable?

It is an offer, not a fixed fee. You can ask the supplier for a better price or look at offers from other suppliers.

Can I accept the renewal and still switch later?

Once you agree a new fixed contract, you are usually bound by it for the term. Leaving early normally means exit fees.

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Your business energy renewal letter: what to check