- FSB says suppliers have increased standing fees for small businesses
- Small business pays almost £10 a day in fixed costs
- Have your ongoing costs increased? Get in touch: firstname.lastname@example.org
Small businesses are facing crippling increases in ongoing charges on their energy bills, according to the sector’s trade body.
The Federation of Small Businesses (FSB) has claimed that some suppliers are increasing permanent rates “in order to inflate small businesses’ bills”.
Ongoing charges are fixed fees that are paid regardless of how much energy you use to cover operational costs.
Small businesses accuse suppliers of increasing fixed charges on their energy bill
They are under increased scrutiny due to rising rates and customers’ inability to reduce the price of their bills.
The energy regulator Ofgem opens consultation on permanent charges at the end of last year, asking households and businesses for their views on the charges.
A typical household pays 53p a day for electricity and 30p a day for gas, which is currently capped, but businesses face much higher prices.
The FSB has received complaints from its members about huge increases in fixed fees, with no way to change the “stealth fees” that are driving up their bills.
A Dorset car parts company which was paying 70p a day in July 2021, has had its ongoing charges increased 12 times and is now paying £9.69 a day.
Another Highland business saw its ongoing charges rise by 32p to £7.50, adding £2,500 to its annual bill.
It comes just days after FSB research showed that utilities were once again the most frequently cited cause of rising cost pressures.
FSB National Chairman Martin McTague said: “Energy suppliers have some explaining to do about sudden and dramatic increases in fixed tariffs, which are becoming a form of regressive charging that hampers growth, confidence and investment small businesses.
“Even now that wholesale energy prices have fallen from the peak we saw in 2022, small businesses are still scratching their heads at skyrocketing bills.”
The lobby group is calling for greater transparency from suppliers on how they calculate fixed costs and a reduction in the gap between rates charged to businesses in rural and urban areas.
In addition to operational costs, ongoing charges also include costs related to the bankruptcy of an energy supplier and acquisition from suppliers taking over bankrupt companies under the Suppliers of Last Resort (SOLR) regime.
The FSB has called for these costs to be excluded entirely as they “only directly benefit the profits of the largest energy suppliers”.
McTague said: “Small businesses do not have the same protection as individuals when it comes to energy price rises. Business energy bills could continue to remain high if the fixed charge system remains as it currently is.
“A more transparent permanent fee system is needed to ensure competition in the market and, importantly, to allow small business customers to clearly understand what they are paying for.”
This comes just a few months after the energy suppliers have been accused of paying secret commissions to third-party energy brokers.
Last summer, law firm Harcus Parker launched a £2bn legal action against energy companies, claiming businesses and other organisations, including care homes and charities, had , unknowingly, paid excessive amounts for energy as prices skyrocketed.