Energy giant EDF has launched a dedicated Small & Medium Enterprises (SME) electricity contract as part of its Customer Commitments, in which it pledged in April 2012 to improve services to SMEs.
The New Start tariff is aimed at entrepreneurs, start-ups and businesses that have moved into new premises, and features short term contracts of six-to-nine months, freedom to leave the contract without penalty if their circumstances change unexpectedly, and a fixed, daily charge of just 5p.
EDF will also not automatically roll over New Start customers at the end of their contract, a key measure campaigned for by energy lobbying groups.
Richard Hughes, director of SME at EDF Energy, said he hoped the combination of flexibility, simplicity and low standing charges New Start offers will help remove one of the barriers which could affect a businesses’ success.
Customer Sandra McGarrigle said in a press release that she chose EDF's New Start tariff for her new Betty La La’s restaurant in Brighton because not only was it cheaper, but also she isn't tied in long-term.
"I am so busy at the moment that the last thing I want to be worried about is gas and electricity and just don’t have the time to be shopping around. I can say now, 'that’s sorted', and in nine months when I have more time I can review it,” she said.
The deal got the thumbs up from energy comparison sites too.
Ashton Berkhauer, deputy chair of EnergyForecaster.co.uk, told Huff Post UK: "This is an innovative idea and EDF is to be applauded for trying to make life easier for start-ups. A short contract lasting six to nine months may look very attractive to a business that is just starting up and is unsure about what their energy needs will be, as could the promise of no exit fees.
"It's also positive that EDF won't roll customers onto a 12-month contract when their New Start deal ends, as our research has found that 68% of businesses think it's an unfair practice. Instead businesses will go onto a variable rate tariff, and while this is preferable to being rolled over, businesses need to remember to go and find a new fixed price deal as quickly as possible if they don't want to be at the mercy of fluctuating prices.
However, Berkhauer said he was disappointed by EDF's decision to not offer the tariff through business energy brokers and comparison sites.
"The recent Consumer Focus report 'Under the Microscope' said that brokers provide value when it comes to getting a better deal, and a large number of businesses use brokers when they are looking for a new energy contract, so it's disappointing that some will potentially miss out on this tariff as a result of EDF's decision," he said.
Kate Rose, head of energy at Confused.com, was also impressed by EDF's move.
She told Huff Post UK: “It is great news that in this economic climate EDF are thinking about ways to support new business start-ups. The first few years of a new business can be challenging and a daunting experience, with many unknowns.
"The fact this tariff provides fixed rates to protect new businesses from price rises, and does not have exit fees will undoubtedly provide extra reassurance to entrepreneurs in their new ventures.
"We strongly urge all business owners to make sure they properly research energy tariffs, whether they are just starting out or not, to make sure they are on the best tariffs for their business needs.“
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