Commercial power retailers EDF and British Gas are the first major suppliers reported to have offered lower cost deals designed to rescue thousands of small companies trapped by their own existing high tariffs.
Trade groups and enterprise bodies continue to complain that too many brokers and suppliers of commercial energy caught unsuspecting SMEs with excessive deals, as tariffs fluctuated uniformly and steeply upwards.
EDF reportedly agreed this week to offer new deals to 15,000 small and medium businesses trapped in long-term contracts fixed when energy market prices reached a historical peak last year.
Eligible companies such as independent shops, hairdressers and small factories will be offered contracts set at lower rates for longer periods to make their bills more affordable, EDF indicated.
Last month British Gas became the first supplier to break ranks, as it offered reductions on existing deals for commercial energy.
The supplier’s parent Centrica said it would extend contracts by up to 12 months at lower rates. An unspecified number of eligible businesses will benefit, including pubs, cafes, restaurants, hairdressers, shopkeepers, and charities. It also announced grants totalling £15m to help businesses cover their bills.
The Federation of Small Businesses claimed almost 100,000 firms are at risk of going under, having fixed their long-term energy contracts last year when market prices reached record highs in 2022’’s third quarter.
FSB spokesperson Craig Beaumont said: “The devil will be in the detail to make sure that [EDF’s] promised 15,000 contracts do indeed match a reasonable fixed price for the forthcoming year. We will be checking on the first contracts to make sure.”
“Other big energy companies must now follow suit so other small firms aren’t left behind by their energy company,” he said
Philippe Commaret, EDF’s managing director of customers, told a newspaper: “While we aren’t able to rewrite all contracts, we recognise that some businesses were especially impacted, and we are doing what we can to help.”
Ofgem officials are also reportedly showing concern about high tariffs’ impact on small firms.