EDF and British Gas offer revised rates for small businesses

Energy companies are under growing 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 businesses that are trapped in long-term contracts fixed when energy market prices reached a historical peak last year.

Eligible companies such as independent shops, hairdressers and small factories will be offered contracts set at lower rates for longer periods to make their bills more affordable, EDF said.

The French energy company bowed to growing calls from business groups for energy suppliers to reopen their contracts two weeks after British Gas broke ranks to cut costs for its customers.

Its parent company, Centrica, said British Gas 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 £15m to help businesses cover their bills.

Almost 100,000 businesses are at risk of going under after fixing their long-term energy contracts last year when market prices reached record highs in the third quarter of last year, according to the Federation of Small Businesses (FSB).

These companies are still locked into long-term contracts that will force them to pay inflated prices based on last year’s peak for months or even years to come.

EDF said its fixed price contracts rose in line with rocketing energy markets last year because it bought the volumes of energy it needed to supply its customers when prices were at their peak.

Philippe Commaret, EDF’s managing director of customers, said: “Whilst we aren’t able to rewrite all contracts, we recognise that some businesses were especially impacted, and we are doing what we can to help.”

The Guardian understands many major energy companies have resisted calls to cut or renegotiate their energy deals despite growing concerns among government ministers and senior officials at the energy regulator, Ofgem.

Craig Beaumont, the FSB’s external affairs chief, said: “The devil will be in the detail to make sure that [EDF’s] promised 15,000 contracts do indeed match a reasonable fixed price for the forthcoming year, so we will be checking on the first contracts to make sure.”

“Other big energy companies must now follow suit so other small firms aren’t left behind by their energy company,” he said.