What Are Energy Contracts? Should You Sign One?

There are several energy retailers in the United Kingdom that provide gas and electricity services to many business workplaces and residential areas. How this is done is by entering a contract, which binds an individual or a corporation to the energy retailers so that even if the corporation moves into a new workplace or an individual moves to a new home and they start using electricity and gas without the help of the retailer, their contract will be known as a “deemed arrangement”. What this means is that the retailer will be held responsible for such arrangements for providing energy and gas at the new property. 

People or companies who often get stuck in situations like these have a legal responsibility to contact their retailer and enter a new contract as soon as they can. It will also be their responsibility alone to pay for any energy or gas used at the property. Before signing any contract with energy retailers, it’s important to know what they hold in store for the future. There are two types of energy contracts:

1. Standard Retail Contracts:

When it comes to standard retail contracts, the most commonly signed contracts an energy retailer offers. You’ll find yourself agreeing to terms and conditions that are fixed and can’t be changed, even by the retailers themselves. There are some standard retail contracts in which the price one will be paying for the services will be fixed by the government of the territory, or the state itself. To know if you’re on this contract, ask yourself if you’ve ever changed retailers or if you’ve contacted someone about an energy contract. If you haven’t, you’re with a standard retail contract. 

2. Market Retail Contracts:

These contracts, although not commonly used, have a different methodology to them. Not all of the terms and conditions set by the retailer will be fixed, there will be some terms that vary from contract to contract, and are completely dependent on the retailer. If they want, they can change a condition with someone’s contract, and keep it the same with someone else’s. Not everyone can be considered eligible for market retail contracts that are energy or gas retailers, but to know this one will probably have to shop around to know what offers are available to them. 

Relatively, market contracts cost less than the standard retail contracts since they also offer renewable energy or discounts, but it is important to remember that these contracts have a fixed term duration where there’s a cancellation fee that can empty one’s pockets if they decide to leave early. These contracts differ between retailers and it’s important to get one that best suits your needs, otherwise you’ll end up regretting it since you won’t be able to cancel the contract. 

If you or someone you know has been stuck in a contract with an energy retailer that they’re unhappy. It’s important to consider different options with the help of Utility Bidder if you’re located in the United Kingdom. They have some of the best guides about these services and are definitely a good read!