Out of Contract Rates and why they should be avoided
10 August 2023
With ongoing volatility in the energy market, it has never been more important for UK businesses to actively manage their gas and electricity contracts. One of the most costly mistakes organisations make is allowing contracts to lapse onto out of contract energy rates, also known as deemed energy rates.
These rates are significantly higher than standard contracted prices and can have an immediate and damaging impact on business energy costs.
What Are Out of Contract Energy Rates?
Out of contract energy rates are applied when a business energy contract ends and no new agreement is put in place. Instead of stopping supply, the energy supplier continues providing electricity or gas under a deemed or out-of-contract tariff.
These rates are also applied when a business:
- Moves into new premises without arranging a contract
- Takes over a site where no energy agreement is in place
- Allows an existing contract to expire without renewal
In many cases, deemed energy rates can be significantly higher than market rates -- sometimes double what a business would pay under a fixed or flexible contract.
Suppliers see that an organisation are not proactively managing their utility bills and take advantage by charging an inflated rate until a client is willing to commit to a fixed length of contract.
Why Deemed Energy Rates Are So Expensive
Suppliers charge higher rates because deemed and out-of-contract tariffs are:
- Short-term by nature
- Unhedged against wholesale market volatility
- Designed to encourage businesses to commit to a contract
Suppliers assume that businesses on deemed rates are not actively managing their energy procurement, and pricing reflects this lack of commitment. Importantly, out of contract energy rates are not fixed, meaning businesses are fully exposed to market movements.
The Risks of Staying on Out of Contract Rates
While there may be brief periods where falling wholesale prices reduce costs, this approach is extremely risky. Businesses on deemed rates face:
- Sudden price increases if wholesale markets rise
- Additional non-energy charges
- No budget certainty
- Higher overall costs than equivalent fixed or flexible contracts
Any potential benefit from falling prices is far better achieved through a flexible energy contract, rather than remaining exposed on out-of-contract tariffs.
How to Get Off Deemed Rates
If your business is currently on deemed or out of contract energy rates, the good news is that you can usually switch quickly.
Steps to Get Off Deemed Energy Rates:
- Confirm your current tariff status with your supplier
- Compare available business energy contracts across the market
- Secure a fixed or flexible contract that suits your usage and risk appetite
Once a new contract is agreed, your supply will move off deemed rates—often within days.
How to Avoid Out of Contract Rates in the Future
The most effective way to avoid deemed tariffs is proactive contract management:
- Track contract end dates well in advance
- Review renewal options up to six months before expiry
- Monitor market conditions to secure competitive pricing
- Use an in-house energy team or a trusted energy broker
Planning ahead ensures your business avoids unnecessary exposure and inflated charges.
Out of contract energy rates and deemed energy rates are among the most expensive ways to buy business energy. While supply continuity is guaranteed, the financial cost of inaction can be significant.
Understanding how to get off deemed rates and securing a suitable contract protects your business from volatility, improves cost certainty, and reduces unnecessary spend.
f your business is currently on out of contract energy rates, or you’re concerned about falling onto deemed tariffs when your contract ends, we can help.
We will:
- Review your current supply
- Compare live market options
- Help you move off deemed rates quickly and securely
📧 Contact us at admin@seemoreenergy.co.uk, or fill in the form below and one of our specialists will be in touch.
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February 2026 Review When writing monthly reviews, I research and make notes throughout the month that allow the final writing process to be straightforward, with all key points already in place. For this month, almost all of my notes had to be torn up and thrown away on the final day of February when the US declared war on Iran. It is rare that one story has the ability to cause a seismic shift of such magnitude that all other news affecting energy prices seem irrelevant by comparison, but – for the first time since the Russia-Ukraine conflict began – we have a geopolitical event of that level. Electricity prices for the Summer’26 season had dropped as low as £65.66/MWh in mid-February, but opened up at £79.70/MWh this morning, showing an over 20% increase from this low point. Meanwhile, wholesale UK gas prices are trading 25% higher than when the market closed on Friday. For a business set to consume 10,000MWh of electricity during the summer, this represents a price increase of over £140,000 when comparing today’s price to the February low point.
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How Do I Find Out Who My Energy Supplier Is? This is a surprisingly common question, particularly if you’ve just moved into a new property, taken over an existing site, or inherited responsibility for energy procurement. If you don’t know who supplies your electricity or gas, don’t worry. There are clear steps you can take to find out quickly and avoid unnecessary delays, billing issues, or out-of-contract rates. 1. Check Recent Bills or Tenancy Documents If the property has been occupied recently, the simplest place to start is with a previous energy bill. This will confirm: The supplier name Your account number The supply address Your MPAN (electricity) or MPRN (gas) If you’ve just moved in, your landlord, managing agent, or outgoing tenant may also be able to confirm the supplier. 2. Use the National Databases If no bills are available, you can use the industry’s central databases. For electricity , contact your local Distribution Network Operator (DNO). In England, Scotland and Wales, you can find your DNO via the Energy Networks Association website . They can confirm your current electricity supplier and provide your MPAN. For gas , you can contact the Meter Point Administration Service (MPAS) via the Xoserve database, or use the find my supplier tool. These services are free and typically provide confirmation immediately. 3. Contact the Meter Operator In some cases, particularly with larger commercial sites, your appointed meter operator may be able to confirm the registered supplier. This is more common where contracts have been arranged historically through brokers or third parties. Common meter operators include IMServ, Npower, and Stark. 4. Act Quickly to Avoid Out-of-Contract Rates If you’ve taken over a site and haven’t agreed a contract, you could be placed on deemed or out-of-contract rates . These are usually significantly higher than negotiated market rates. Confirming your supplier allows you to: Request historic consumption data Understand your current contract status Avoid unexpected charges Begin procurement discussions Why It Matters Knowing your supplier isn’t just administrative, it’s commercially important. Without clarity on who supplies your energy, you can’t properly review your costs, assess renewal timing, or manage market exposure. If you’re unsure where to start, or if you’ve identified your supplier but don’t know what contract you’re on, SeeMore Energy can help you interpret the position and plan your next steps with confidence. Getting clarity is the first step towards controlling your energy strategy.
The Capacity Market: An untapped revenue source With wholesale markets volatile and network costs rising, many businesses are looking at strategies to reduce energy spend. In addition to lowering costs, there are ways that large consumers of energy can monetise their existing energy set up. By selling back unused capacity via the Capacity Market (CM), businesses can generate tens of thousands of pounds each year, without having to make any material changes to how they run their operations. What is the Capacity Market? The UK Capacity Market was introduced in 2014 to safeguard security of supply. The CM has two main objectives: Incentivise new sources of generation that can prevent issues on the demand-side. Provide a last-resort mechanism to prevent electricity shortages during times of system stress. Administered by National Energy System Operator (NESO), the scheme pays providers for being available to deliver capacity during periods of system tightness. Businesses can receive payments, not for generating electricity, but for committing to reduce demand or increase supply if required. Capacity is secured through annual auctions (one year ahead and four years ahead), which set a £/kW price. Once contracted, participants receive an availability payment in return for meeting testing requirements and being ready to respond to a system stress event. Since the CM’s inception, there has never been a full system stress event triggered. Although precautionary notices have been issued and subsequently stood down – normally within 2 hours of being issued. How Can Businesses Make Money from It? For many businesses, the opportunity lies in Demand Side Response (DSR) . If a business can demonstrate that it is capable of reducing load during a stress event -- even for just 30 minutes -- that reduction can be contracted into the Capacity Market. The process for this is: Historical half-hourly data is analysed to establish normal usage. Periods where usage dropped materially (e.g. shutdowns, maintenance, early finishes, seasonal dips) are identified. The difference between normal usage and the reduced period becomes the site’s deliverable capacity. This capacity is aggregated with other businesses into a CM Unit (CMU) and entered into the auction. Payments are then made quarterly in arrears for being available.
Forecasting annual electricity and gas consumption is one of the most important -- and often underestimated -- stages of the procurement process. While timing the wholesale market and contract structure typically receive the most attention, the accuracy of the consumption forecast can have a large influence on overall energy costs. Suppliers price risk based on expected volumes, network charges are dictated by usage patterns, and internal budgets depend on accurate projections. Without a reliable forecast, organisations expose themselves to avoidable financial and contractual risk. How Consumption Forecasting Works Forecasting begins by analysing historical usage. Half-hourly electricity data, meter reads, and seasonal profiles provide a baseline that shows how a site behaves over time. This historical data is then adjusted to account for known changes, such as production increases, machinery upgrades, operational reductions, or energy efficiency projects. For larger or more complex organisations, forecasting may involve modelling peak demand, load shape, and expected operational shifts across multiple sites. The aim is not simply to estimate an annual total, but to understand when and how energy will be consumed throughout the year. That detail becomes particularly important when selecting contract structures or assessing exposure to network charges. How It Impacts Budgeting Energy often represents a significant operational cost, particularly for manufacturers and other energy-intensive users. Accurate forecasting enables finance teams to build realistic budgets and avoid the shocks of unexpected costs. Reliable forecasts also allow organisations to model different pricing scenarios. Understanding likely consumption enables comparison between fixed contracts and flexible purchasing strategies . It also supports long-term planning by quantifying the financial impact of operational changes or sustainability initiatives.
Why it’s important your energy bills are in the correct company name For many businesses, energy bills aren’t reviewed with a high-level of scrutiny. As long as the meter is live and the lights stay on, the paperwork often goes unquestioned. However, having electricity and gas bills issued in the correct legal company name is more important than many organisations realise. Failing to ensure that your invoice is correctly addressed can create unnecessary risk and cost. How it can impact your business Energy contracts are signed with a specific legal entity, not a trading name or group brand. If the company name on the bill does not match the Companies House records, the contract may not accurately reflect who is legally responsible for the supply. This can cause problems in the event of disputes with the supplier, changes of tenancy or site ownership, and contract renewal or termination. In some extreme cases, suppliers can refuse to amend or even enforce contracts where the named party is incorrect. Affecting credit checks and pricing Suppliers assess risk using the company name registered on the account. If this is incorrect or outdated: Credit checks may fail or be delayed Higher security deposits may be requested Less competitive pricing may be offered For growing businesses, group structures or recently incorporated entities, this can result in paying more than necessary for energy, simply because the account information isn’t aligned. Delaying contract changes and site updates Something as simple as renewing a contract, adding meters, or updating a supply address can become complicated if the company name is wrong. Common scenarios include: Sites transferred between group companies Trading names used instead of legal names Businesses that have changed structure or ownership Each of these can trigger lengthy data disputes between suppliers, distributors and settlement systems, often delaying changes by weeks or months. Issues with VAT, levies, and exemptions Where VAT exemptions exist, the name on the invoice is required to match the name of the business that has the exemption. There are numerous government schemes that offer businesses relief from specific environmental levies and non-commodity charges . Many of these schemes – such as the British Industry Supercharger – are applied to companies with eligible SIC codes. If the business name is incorrect, then the SIC code cannot be verified and the business may end up missing out on the exemption. Future Contracts When tendering energy contracts, suppliers rely on accurate account data. Incorrect company names can slow down the quoting process, result in quotes being withdrawn, or lead to errors in contracts or start dates. For businesses managing multiple sites, this becomes even more critical. How we help businesses get it right As an energy broker, we regularly see cost and risk created by something as simple as incorrect account information. We help businesses: Verify company names against Companies House Correct supplier and industry records Manage name changes during restructures or acquisitions If your business requires help with ensuring that your invoices are being issued in the correct name, contact us today and one of our experienced team can assist with all of your energy needs.
Rising TNUoS and DUOS charges By Adam Novakovic T.S Eliot once said that “April is the cruellest month” and in terms of the prices many businesses pay for their electricity, his quote is prophetically true. While he may not have envisioned rising TNUoS and DUoS costs being the reason for the starkness of the month, for many British businesses, the rise in non-commodity charges that take effect from April 1 st will add unwanted and unneeded extra costs to their energy bills. From the beginning of April, businesses across the UK will see significant increases in two major components of their energy bills: Distribution Use of System (DUoS) and Transmission Network Use of System (TNUoS) charges. These network charges are becoming an increasingly large part of business energy bills -- especially for companies that operate in energy-intensive industries. DUoS & TNUoS, and Why They Matter Both DUoS and TNUoS are network charges applied to electricity bills. As non-commodity charges, they are not related to the cost of energy itself: DUoS charges cover the cost of running, maintaining and reinforcing local distribution networks that carry power to sites. They are paid as a standing charge (in p/day), a capacity charge (in p/kVA/month), and in red/amber/green unit rates – depending on the time of consumption. TNUoS charges fund the high-voltage transmission network operated nationally. This is applied as a standing charge (in p/day). For many businesses, these line items are already making up over a third of their total electricity costs . How these charges change from April 1 st 2026 TNUoS The TNUoS rate that businesses pay is set by NESO (National Energy System Operator). How much a meter is charged per day is dependant on the assigned TCR band . For sites with lower expected consumption, they will be grouped in a lower band, whereas the largest consumers will be in the higher bands and they will be charged more.
By Adam Novakovic January began with a sense of optimism. The new year brought hopes that energy prices could soon return to levels not seen since 2021, wholesale prices were falling and large quantities of new LNG were scheduled to be available for import during 2026. However, events that transpired during the first 31 days of the year have caused prices to rise and have sent waves of fear throughout the energy markets. The month began with a wave of cold weather leading to above-expected gas consumption. An Arctic blast combined with Storm Goretti brought temperatures down to below -10°C and led to gas power stations being needed to make up the shortfall, causing an uptick in wholesale gas prices.
What is the Weighted Average Price (WAP) in energy? In the UK energy market, Weighted Average Price (WAP) refers to the average price paid for electricity or gas over a period of time, weighted by the volume bought at each price point. For those on flexible energy contract, the WAP represents what the unit rate will be when multiple purchases were made for the same period. In other words, it answers the question: “What did we actually pay for our energy once all purchases and volumes are taken into account?” This makes WAP far more meaningful than a simple average, especially in volatile markets. How WAP works in practice Energy prices move constantly. Businesses, particularly those on: Flexible contracts Basket or portfolio products Pass-through arrangements often buy energy in multiple tranches at different times and prices. For example: 40% of energy bought at 10.0p/kWh 30% bought at 12.0p/kWh 30% bought at 9.0p/kWh The WAP reflects the price-weighted impact of each purchase, giving a single unit rate that reflectsthe real cost exposure. Why WAP matters to UK businesses 1. It reflects real procurement performance WAP shows how effective your buying strategy has been, not just whether the market went up or down, but how your timing and volumes performed. 2. It’s essential for budgeting and forecasting Using WAP allows businesses to: Accurately forecast energy spend Compare performance year-on-year Avoid misleading headline prices This is especially important for manufacturers and high-consumption sites where small price differences materially impact costs. WAP vs fixed prices Fixed contracts : WAP is locked in at the point of contract Flexible contracts : WAP evolves over time as more volume is bought This means WAP can improve with smart market timing and deteriorate if exposure is unmanaged. For those on fixed contracts, it can be vital that portfolios are being managed by a person or group with experience and expertise in energy markets. Ultimately, the strategy of when and how much to buy is just as important as the market itself. WAP as part of your purchasing strategy Weighted Average Price is the truest reflection of what your business actually pays for energy. Understanding it is critical to controlling cost risk in volatile markets. For larger SMEs and energy-intensive businesses, having a clear energy purchase strategy and having this strategy communicated through regular reporting can be vital for forecasting future energy costs. If your business would like assistance with understanding the current state of your portfolio, or advice on purchasing and management strategies, contact us today to see how we can help lower your electricity and gas costs and help you See More of the hidden value in your energy portfolio.
Meter types explained (LV, HV and EHV) For many businesses, electricity is treated as a fixed overhead -- something that cannot be changed. But in reality, how your site is connected to the electricity network can significantly influence what you pay , and many organisations are unknowingly on a setup that no longer suits their operations. Whether your supply is Low Voltage (LV), High Voltage (HV) or Extra High Voltage (EHV) impacts network charges, flexibility, and future growth. Understanding the difference could be the key to reducing costs and avoiding any unpleasant surprises. Low Voltage (LV): common, simple — and often overlooked Low Voltage (LV) supplies electricity at up to 1,000 volts and is the most common connection type for SMEs, offices, and retail units. LV customers usually benefit from: Straightforward billing Lower DUOS standing charges Minimal technical involvement However, simplicity can mask inefficiency. As businesses grow, extend operating hours or add energy-intensive equipment, LV sites can find themselves paying disproportionately higher network charges as red and amber unit charges make up a higher percentage of the costs. If your electricity costs have risen faster than your usage, your meter type could be part of the reason. High Voltage (HV): complexity that creates opportunity High Voltage (HV) connections operate between 1,000 and 22,000 volts and are typically used by manufacturers, large warehouses and energy-intensive commercial sites. HV supplies bring: Higher capacity charges Greater exposure to kVA related costs More detailed half-hourly consumption data While this can appear daunting, it also creates opportunity. Businesses that understand how and when they use electricity can actively influence costs, often achieving savings that are simply unavailable at LV. Many HV customers pay for more capacity than they need --or the wrong capacity altogether -- without realising it. Contact us today and we can conduct a kVA review that could potentially save £10,000s annually. Extra High Voltage (EHV): where energy becomes strategic Extra High Voltage (EHV) applies to supplies above 22,000 volts and is reserved for the UK’s largest electricity users. At EHV level: Network charges are highly bespoke Costs are closely linked to site-specific infrastructure Small demand changes can have large financial impacts For these businesses, electricity is not just a utility, it’s a strategic cost driver that requires ongoing oversight. Without regular review and proactive management, EHV sites can sleepwalk into avoidable six-figure cost increases. Why understanding meter type matters Meter type determines: How DUoS and other network charges are applied How much control you have over peak costs Whether your connection aligns with how your site actually operates today Many businesses inherit their meter type and never question it, even when their operations change dramatically. These changes in how a meter operates can require reviews of kVA capacities, meter type, and TCR bands . All of which can help towards reducing energy spend. How we help businesses take control As an energy broker, our role goes far beyond securing competitive unit rates. We help businesses: Understand whether their current meter type still fits Identify inefficiencies hidden within network charges Plan energy strategies that support growth, not restrict it If you’d like to understand whether your LV, HV or EHV supply is working for your business, or quietly working against it, a no-obligation review could uncover meaningful savings and future-proof your energy strategy.