Warning as Deeside firms face soaring energy costs

Businesses in Deeside are being warned they could be paying up to 80% more than necessary on their energy bills, due to being on default or ‘deemed’ tariffs.

According to BusinessComparison, a UK-based price comparison service, companies without formal energy contracts are often charged significantly more than those who negotiate fixed-rate deals. Ofgem data indicates these deemed rates can be up to 80% higher.

The warning comes amid wider financial pressures on businesses, including the recent rise in the National Minimum Wage and National Insurance Contributions introduced in March. These increases could mean additional costs of thousands of pounds annually for some companies.

BusinessComparison, along with parent company Bionic, reports that more than 60% of businesses using its Digital Renewals service save an average of £500 annually on energy. One in five businesses saves over £1,600 a year.

Philip Brennan, Founder and Managing Director of BusinessComparison, said: “Businesses in Deeside and across the UK are being hit from all sides.

“We’ve just come through the cost-of-living crisis, we’re still dealing with the long tail of Brexit and Covid, and now firms are being hit with higher NICs.

“On top of that, and with no cap on business energy prices, many are unknowingly overpaying on their energy bills – some by up to 80%. It’s a perfect storm and it’s threatening the resilience of thousands of small and medium-sized businesses.”

Deemed rates apply when a business has not signed a formal energy contract, with Ofgem estimating that around 10% of microbusinesses fall into this category.

Despite the potential for savings, many businesses have never switched energy suppliers. Data from the Federation of Small Businesses suggests that 43% of firms remain with their original provider.

Philip Brennan added: “Switching suppliers is one of the quickest ways businesses can cut costs right now. With bills rising and margins tightening, it’s a simple step that could make a big difference – so we’d urge firms to act now and potentially save big.”