Deemed Business Energy Contracts

What is a deemed business energy contract?

A deemed business energy contract is a temporary agreement that automatically applies when a business uses gas or electricity at a property without having formally agreed a contract with an energy supplier.
Deemed contracts ensure businesses continue to receive an energy supply, even when no negotiated agreement is in place. While they provide uninterrupted access to energy, deemed rates are typically more expensive than standard business energy tariffs, making it important to arrange a formal contract as soon as possible.

When do they apply?

A deemed contract is created automatically when a business consumes energy without entering into a formal agreement with the supplier responsible for the property.

Rather than disconnecting the supply, the supplier places the business on a deemed tariff until a new contract is agreed or the business switches to another supplier. This arrangement allows energy to continue flowing to the premises while giving the business time to organise a suitable energy contract.

Most deemed contracts are based on standard supplier rates and usually come with fewer benefits than negotiated business energy agreements.

Are deemed energy contracts more expensive?

In most cases, deemed energy contracts are more expensive than agreed business energy tariffs.

• Supplier Risk: Suppliers are providing energy without a fixed-term agreement in place, which creates greater uncertainty. To account for this additional risk, deemed rates are often priced higher than contracted business energy tariffs.
• No Price Certainty: Unlike fixed energy contracts, deemed tariffs are not negotiated in advance. Businesses do not benefit from rates secured through a contract, which can result in higher charges for both electricity and gas.
• Short-Term Contract Arrangements: Deemed contracts are designed as temporary solutions rather than long-term energy agreements. As a result, suppliers typically do not offer the competitive pricing that may be available through longer-term business energy contracts.

When do they apply?

A deemed business energy contract may apply in situations such as:

• You move into a new business property and begin using gas or electricity without formally arranging a contract with the existing supplier.
• Your previous business energy contract expires and you do not agree a new tariff before the end of the contract period.
• A change of tenancy occurs and no new energy agreement has been put in place for the premises.
• A business takes over a property and continues using energy before selecting a supplier or tariff.

Your rights with a deemed business energy contract

Businesses on deemed contracts still have important rights and protections. Suppliers must clearly publish their deemed rates and make pricing information available upon request.

Unlike many fixed-term business energy contracts, deemed agreements generally do not have lengthy contractual commitments. This means businesses can often arrange a new contract or switch supplier relatively quickly once they find a more suitable tariff.

If you believe you have been incorrectly placed on a deemed contract, you should contact the supplier directly to discuss the situation and review your available options.

Looking for the right business energy tariff?

Compare business energy tariffs

If your business is currently on deemed rates, comparing business energy tariffs could help you secure a more suitable contract. Reviewing options from multiple suppliers allows you to compare pricing, contract lengths, renewable energy options, and service features before making a decision.

The best place to start is with a business energy quote, helping you compare available tariffs and move away from potentially expensive deemed rates.