In the second of our blog series looking at what needs to be considered when connecting a new gas supply to your business, we continue discussing the difficulties businesses may face.
- Lack of understanding of what your business needs
Connection forms from suppliers sometimes ask how much gas you need but omit to ask other key questions. Poor estimations of your own business’ energy requirements can prove to be a costly mistake. Take the example of a food manufacturer that was offered a gas supply with inadequate pressures, simply because the connections company failed to check what the company needed, a mistake that would have cost our client £80,000.
- Inconsistent costs
The range of costs quoted by suppliers can be quite considerable; it is not unusual to see 50% differences between contractor quotes. Often larger connection companies manage their workloads by employing layers of subcontractors, each with their own additive costs which can make for very unfavourable pricing. When customers have difficulty in accessing alternative solutions they can often be forced to take this route regardless.
- Suppliers’ penal rates and limiting terms and conditions
A new connection has no consumption history and attracts unfavourable rates from suppliers who price your supply to cover their perceived ‘risk’ of over or under usage. Many will impose consumption clauses that penalise over-under usage, which can cause problems due to the uncertainty of the new supply usage.
In most instances we recommend having volume tolerance removed from your contract to allow flexibility to use whatever you need until you have built up a usage history.
In the last blog in this series we will look at how companies can avoid the potential frustrations of installing a new gas connection. In the meantime, if you would like to talk to one of our energy managers about your new gas connection please call us on 03330 433 233.
Read the first blog of the series here.