What are out of contract and deemed tariff rates?

Here, we explain out of contract and deemed tariff rates, and offer impartial advice to help your business avoid unexpected energy costs.

If you’re in the process of moving your business to new premises, you may have come across out of contract or deemed tariff rates on your most recent energy bill. These rates apply to gas and electricity contracts, and usually come into play when an energy contract expires, or when a business moves to new premises and no suitable arrangements are in place for using energy at the new premises.

Out of contract rates

Out of contract rates apply when an energy contract between the customer and supplier comes to an end, and no new or alternative rate is put in place. When a gas or electricity contract expires, the rates for supply revert to a default charge — this is called the out of contract rate.

Business energy customers will be charged at the out of contract rate until a new contract is put in place, they move out of the premises or they switch to a new supplier. The default rate for out of contract energy use may be more expensive than rates available under contract, so we’d always recommend moving off this rate as quickly as possible.

Click here for more information on out of contract rates

Deemed tariff rates 

Similar to out of contract rates, deemed tariff rates are charged for gas and electricity use when there has never been a contract in place e.g. a new tenant moves into an existing site. In such circumstances, the customer is charged the deemed rate by the property’s existing gas or electricity supplier.

Deemed tariff rates apply until a new contract is put in place, or until the business moves out of the premises or switches to a new supplier. Because deemed rates may be more expensive than rates available under contract, you should try to move off this rate as quickly as possible.

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Switching and consumer rights

If you’re currently being charged out of contract or deemed tariff rates for your gas or electricity supply, your current supplier cannot prevent you from switching to a new supplier, or charge a termination fee for moving. Also, you do not need to give any form of notice to cancel an out of contract or deemed tariff contract.

For more information on out of contract and deemed tariff rates give the Gazprom Energy team a call today on 0845 230 0011.