What Happens When My Business Energy Contract Expires?

Most businesses don't give their energy contract much thought until the bills start climbing. Then someone notices the unit rate has gone up, or the direct debit has increased, and the question becomes: what actually happened?

The answer is almost always the same. The contract expired, nobody arranged a new one, and the supplier moved the account onto their out-of-contract rates.

Here's what you need to know — and what your options are.

A fixed-rate business energy contract locks in your unit rate and standing charge for an agreed period. That period is typically one, two or three years, though some contracts run for four or five years for larger businesses.

During the contract term, your rates don't change regardless of what happens in the wholesale energy market. That's the point of a fixed contract — price certainty. You know what your energy is going to cost, which makes budgeting straightforward.

When the contract ends, that certainty disappears. Unless you've arranged a new contract before the end date, your supplier will move you onto their out-of-contract rates. These are sometimes called deemed rates, Variable Business Rates, or simply the supplier's standard rates. Whatever they're called, they're almost always more expensive than what you were paying on your fixed deal.

Most suppliers will send you a renewal offer before your contract ends. This usually arrives by letter or email, somewhere between three and six months before the end date.

The renewal offer will typically include a new unit rate and standing charge, along with a proposed contract length. It's worth reading it carefully, because:

It may not be their best price. Renewal offers are often set at a rate that assumes you won't shop around. Suppliers know that many businesses simply accept the renewal without comparing alternatives.

It may include a rollover clause. Some contracts automatically roll over into a new fixed term if you don't respond by a specific date. If you miss that date, you could find yourself locked into another year at an uncompetitive rate.

The notice period matters. Most contracts require you to give notice — typically 30 to 90 days before the end date — if you want to switch supplier or decline the renewal. If you miss the notice window, your options narrow considerably.

The safest approach is to treat any renewal offer as a starting point for comparison, not a final answer.

If your contract expires without a new one in place, you'll move onto Variable Business Rates (VBR). This is the supplier's default position — they keep supplying energy, but at rates they set themselves.

Variable Business Rates are not competitive. They're designed to be a temporary arrangement, not a long-term tariff. In practice, many businesses stay on them for months or even years without realising it, paying significantly more than they would on a fixed contract.

The unit rate on VBR can change at any time. The supplier is required to give you notice of any increase, but the notice period is usually short — sometimes as little as 30 days. There's no cap on how high the rate can go.

One small advantage of VBR is that you're not locked in. You can switch supplier or agree a new fixed contract at any time without paying an exit fee. But that advantage is cold comfort if you're paying 40–60% more per unit than you would on a contracted rate.

Some larger businesses — typically those spending more than £50,000 a year on energy — use flexible purchasing arrangements rather than fixed contracts. Under a flexible tariff, you buy energy in tranches at different points in the market cycle, rather than fixing the whole year's supply at one price.

Done well, flexible purchasing can produce lower average costs than a fixed contract. Done badly, it can produce higher ones. It requires active management and a good understanding of wholesale energy markets.

For most small and medium-sized businesses, a well-timed fixed contract is simpler and more predictable than a flexible arrangement.

Switching business energy supplier is simpler than most people expect. The process typically works like this:

You provide us with a copy of your current bill. We check your current rates, your contract end date and your annual consumption. We then approach the market on your behalf and present you with the best available options.

Once you've chosen a new supplier and signed the contract, the switch is initiated. Your current supplier is notified, and the new supplier takes over billing from the agreed start date. Your energy supply is not interrupted at any point — the physical supply to your premises stays exactly the same.

The whole process from first contact to switch completion typically takes two to six weeks, depending on your meter type and the suppliers involved.

There's nothing wrong with staying with your current supplier if they offer a competitive rate. The key word is competitive. Don't stay out of inertia or because switching feels complicated. Stay because you've compared the market and their offer is genuinely good value.

If you want to stay with your current supplier, it's still worth getting independent quotes. Use those quotes as leverage when negotiating your renewal. Suppliers will often improve their offer if they know you've been comparing alternatives.

If you do nothing when your contract expires, here's what typically happens:

In the first few weeks, you'll move onto Variable Business Rates. Your bills will increase, though you may not notice immediately if you're on direct debit and the payment amount hasn't been updated yet.

Over the following months, the gap between what you're paying and what you could be paying on a fixed contract will widen. If wholesale prices rise, your VBR rate may increase further.

Eventually, you'll notice the bills are higher than they used to be. By that point, you may have been overpaying for six months, a year, or longer.

The practical advice is simple: don't wait. Set a reminder in your calendar for six months before your contract end date. That gives you enough time to compare the market properly, negotiate if needed, and arrange a new contract before the old one expires.

Before you sign a renewal or switch supplier, gather the following:

Your current unit rate and standing charge. These are on your bill. Know what you're paying now.

Your contract end date. Also on your bill, or you can ask your supplier directly.

Your annual consumption in kWh. Usually shown on your bill. This is the most important number for comparing quotes accurately.

Your MPAN (electricity) or MPRN (gas). These are your meter reference numbers. Any new supplier will need them.

Any exit fees. If you're still in a fixed contract, check whether leaving early would cost you anything.

Once you have those details, contact us. We'll do the comparison, explain the options clearly, and handle the paperwork. There's no charge for the service — we're paid by the supplier when a contract is agreed.

Related guides: What Are Variable Business Rates? · What Are Deemed Rates? · Understanding the 12 Month Backbilling Rule