Can’t Pay Business Energy Bills Overview
If you can’t pay business energy bills then that is likely to be a sign of your company being insolvent.
This is an inevitable symptom experienced by both individuals and businesses as the cost of living crisis bites.
The problem posed by energy prices for UK businesses is unfortunately unsurprising. The Cage Research Centre at the University of Warwick published a paper called “How large is the energy savings potential in the UK?” on 8 November 2022 which referred to the energy prices problem, warning of an anticipated increase between 2021 and the end of 2022 of over 600%:
Energy prices in the UK are projected to grow by over 600% between the first quarter of 2021 and the start of 2023, propelled by the post-pandemic economic recovery first, and Russia’s invasion of Ukraine later …
Disconnection Of Energy Suppliers Rules
If a business cannot pay business energy bills on time then a supplier can potentially disconnect it when there is no domestic use within the supply. This is not a position to ignore as businesses need energy supplies to trade and keep customers happy, particularly if you are a retail outlet for example. However, you cannot keep your employees happy if they are freezing through the Winter either.
To address your business energy bill you could consider switching energy suppliers, being more efficient with your usage, checking your meter readings to ensure accuracy, or considering a payment plan.
Business Energy Payment Plan
If you want to enter into a Business Energy Payment Plan then the first port of call is to approach your existing business energy supplier to discuss the matter. Many may be sympathetic and look to work with you so that you can pay off your debts over a period of time.
If you want to explore a Business Energy Payment Plan then talk to your supplier as soon as you realise there is a problem before you go into arrears. You will need to explain to them your position in some detail so it is important to have your key financials to hand for when you speak to them. They are likely to want to know what your future plans are so they can see there is a viable way forward if they give you time to pay and keep supplying you.
The Energy Bill Relief Scheme And Grants
Government energy reliefs and grants exist to help businesses but they might not be an overnight solution to the cost of living crisis and company cash flow problems.
Energy Bill Relief Scheme
The Energy Bill Relief Scheme Regulations 2022 (“the Scheme”) became available from 1 October 2022 to 31 March 2023. To be able to claim on the Scheme you need to be a business or either in the voluntary sector or in the public sector to be eligible.
The business claiming needs to be on a fixed price contract that started on or after 1 December 2021 or signing a new fixed price contract or be on the standard variable rate or on flexible purchase or similar contracts.
The Scheme has various exclusions and is protected from being abused.
The Scheme will reduce your business gas and electricity prices:
For all non-domestic energy users in Great Britain and Northern Ireland the government supported price has been set at:
- electricity – £211 per megawatt hour (MWh) / 21.1p per kilowatt hour (KWh)
- gas – £75 per MWh / 7.5p per KWh
For comparison, when the Scheme was announced, wholesale costs in England, Scotland and Wales for this winter were expected to be around:
- electricity – £600 per MWh / 60p per KWh
- gas – £180 per MWh / 18p per KWh
More details on the government website are available for the Energy Bill Relief Scheme.
Energy Efficiency Grants
There are also Energy Efficiency Grants available such as those applicable if you adopt renewal energy infrastructure options.
Almost £5 billion of funding is available to help UK businesses become greener as part of the government’s commitment to reach net zero emissions by 2050.
There is also for example only a Boiler Upgrade Scheme. The Boiler Upgrade Scheme might enable you to obtain a grant to cover part of the cost of replacing fossil fuel heating systems with a heat pump or biomass boiler.
Ofgem has a helpsheet to enable businesses to find business energy efficiency grants and schemes.
Business Energy Bills And Company Insolvency Help
If you are having problems and can’t pay your business energy bills and a supplier will not offer you a payment plan due to your default history then the sooner you seek help the more options we might be able to suggest to you to address the matter.
It is not a foregone conclusion that company closure and Liquidation will arise. Our Licensed Insolvency Practitioner who is our CEO, Elliot Green, can discuss all of the options including the prospect of rescue opportunities such as those that might enable you to restructure the company through a Company Voluntary Arrangement and or Administration procedure. In Administration, the Moratorium might give you a breezing space to enable you to trade out of the situation so get in touch with us.
