Energy firms are under increasing pressure to allow thousands of struggling businesses to change their gas and electricity contracts after two major suppliers agreed to cut rates that had been fixed at the height of the energy crisis.
EDF has agreed to offer new deals to 15,000 small and medium-sized businesses that are stuck in long-term contracts fixed when energy market prices reached a historical peak last year.
EDF said eligible companies such as independent shops, hairdressers and small factories would be offered contracts set at lower rates for longer periods to make their bills more affordable.
The French energy firm was bowed to calls from business groups for energy suppliers to reopen their contracts two weeks after British Gas broke ranks to reduce costs for its customers.
British Gas, its parent company, Centrica, said it would extend contracts by 12 months at lower rates for an unspecified number of eligible businesses, including pubs, cafes, restaurants, hairdressers, shopkeepers, and charities, alongside grants worth 15 m to help businesses cover their bills.
Almost 100,000 businesses have come under after fixing their long-term energy contracts last year when market prices reached record levels in the third quarter of last year, according to the Fed of Small Businesses FSB. Those companies are still locked in long-term contracts that will require them to pay inflated prices based on last year s peak for months or even years to come.
EDF said last year that its fixed-price contracts rose in line with rocketing energy markets, because it bought the volumes of energy it needed to supply its customers when prices were at their peak.
Although we aren't able to rewrite all contracts, we recognize that some businesses were especially impacted and we are doing what we can to help, said EDF managing director Philippe Commaret. The Guardian understands that numerous large energy firms have resisted calls to reduce or renegotiate their energy deals despite growing concerns with the government ministers and senior officials at the energy regulator, Ofgem.
The devil will be in the detail to make sure that EDF's promised 15,000 contract do indeed match a reasonable fixed price for the forthcoming year, so we will be checking on the first contract to make sure, said Craig Beaumont, the FSB's external affairs chief. Other big energy firms must now follow suit so other small firms aren t left behind by their energy company, he said.