Businesses could be charged millions for unused energy during lockdown

Data from Co-op Power reveals that since government restrictions came into place last spring, its members could have paid more than £1m combined for unused energy at closed sites.

Hundreds of businesses, tied into draconian usage agreements with their energy supplier, may be forced to pay millions of pounds for electricity they have not used since March and into this second lockdown, Co-op CEO Steve Murrells has today warned.

Data from Co-op Power reveals that since government restrictions came into place last spring, its members could have paid more than £1m combined for unused energy at closed sites, based on contractual agreements with some previous suppliers. Through Co-op Power’s disruptive ‘No Take, No Pay’ policy, its members have been able to avoid higher energy bills, paying only for the energy they have used during the period.

Today, Co-op Power – the largest co-operative energy buying group in the country – is calling on businesses to join its group, to help them save money during the latest COVID measures and beyond as the UK navigates the recession.

The energy co-operative sees its members buy together for greater value and share electricity from 100 per cent renewable sources. Already enjoying a collective buying power of £200 million a year, Co-op Power is calling out for new corporate members for the first time since it was originally conceived in 2003, to manage the diverse energy needs of the Co-op itself.

On the buying group’s first-ever recruitment drive, Steve Murrells said: “We know first-hand that the pandemic has put extra pressure on businesses. Whether that’s focusing on colleague wellbeing and job security, serving customers safely, supporting communities or just purely surviving. For many, this has meant unforeseen investments being needed just to remain in business.

“Being blindsided by unexpected costs from an energy provider at such a critical time could be the breaking of a business, putting our high streets and the communities they serve at further risk.”

David Roberts has been with the Co-op for more than twenty years and was formerly responsible for property. He has been appointed Power’s new managing director, to maintain momentum for the group and lead growth.

He added: “Take or Pay, also known as Volume Tolerances, are standard contractual clauses which live in the very small print.

“Also, the actual charges for unused energy are rarely made clear to the client as they receive their invoice. The costs might appear discreetly, be hidden within other charges or not be itemised out. So, a business could be paying for unused energy without even realising it.

“Some suppliers agree to spread the cost of unused energy across future years, but usually on the understanding that the client renews their contract. This means that many are repeatedly locked into an energy agreement which doesn’t always work for them, in fear of paying a massive penalty.”

Co-op Power counts Roadchef, Nationwide Building Society and The Royal National Lifeboat Institution amongst its newest members, joining other long-standing names such as National Trust, PA Media Group and Emirates Airlines.

£100m in energy costs have been saved by members so far and the Co-op alone saved more than 165,000 tonnes of carbon in 2019, through Co-op Power.