Resolving an energy supply dispute to reduce business disruption

All businesses rely on energy supplies to allow them to trade to some extent. Even if your business does not use large amounts of energy for manufacturing or other related work, it will require reliable lighting, heating, and internet supplies to conduct business without disruption.

In April 2024, an issue with the electrical installations at the new Co-op Live Arena (Europe's biggest indoor music venue) meant that 6,000 concert tickets were cancelled just hours before it was due to start.  Co-op Live said the postponement was ‘critical to ensure we have a consistent total power supply to our fully electric sustainable venue’.

Any disruption in supply, for whatever reason, will have an impact. Continued or repeated disruption could quickly and significantly damage your business. While the Energy Ombudsman can help in some circumstances, they are limited in what they can do, and can take a long time to help.

In this blog, we outline how your solicitor can help your business by moving quickly to address the impact of an energy supply problem. We look at types of dispute and how to resolve them, as well as what may be possible in terms of compensating your business for disruption suffered.

What sort of dispute might arise with an energy supplier?

One of the most common disputes is that your business is overcharged by a supplier. You could be receiving a higher bill than expected for a number of reasons:

• It may be that the rate you are being charged is not in line with the rate agreed when you signed up, or that you were not aware of the actual rate being charged and could have agreed to a more competitive rate.
• You may be entitled to certain relief that will discount your bills under the Energy Bills Discount Scheme, which is a scheme set up by the Government to help certain businesses with energy bills. This discount should be applied to your bill at source but may not have been.
• Other disputes can arise if you do not pay your invoice on time, which risk your supplier cutting off your supply.
• You may have a dispute because you wanted to terminate your contract but did not properly comply with the terms of your contract on termination.
• There have been reported issues recently with smart meters and inaccurate readings leading to over inflated bills, and they have been known to malfunction when used in conjunction with solar panels, causing unreliability in billing.

It is becoming increasingly common for landlords to install solar panels and provide energy to a tenant as part of the rental package. This can be a complex process, both in the installation and in considering how this affects the lease and both parties’ rights, including rights of access and maintenance for the landlord. Given the complexities, and the relative inexperience of landlords in this area, it is perhaps inevitable that disputes may arise.

However, there are other issues that might also arise for business customers that can have very serious consequences if not resolved as soon as possible.

• For newly constructed buildings, or newly renovated buildings, problems that stem from the installation of a new power supply can lead to a contractual dispute for damages for loss of trade as well as possible physical damage to property.
• An unscheduled outage by the power company for a business that relies on their technology to make profit on a second-by-second basis, such as stock trading, can cause catastrophic damage to the bottom line within minutes, and can lead to a large compensation claim against the energy supplier at fault.
• Alternatively, a power outage could be caused by a third party. For example, what are your options if building works on a neighbouring property cause a stoppage in your power supply which disrupts production of goods or prevents an online business operating? The knock on effect for your trade can be devastating and will require compensating.
• What are your rights if solar panels, fitted by you or your landlord, on your building have malfunctioned and caused damage to your business, causing either physical damage to property or damage to profits due to business disruption?  What if damage is caused by a neighbour’s solar panels that have malfunctioned and inadvertently brought the power system down, or even caught fire?

Any of these matters can lead to the need for professional dispute resolution support.

What are your remedies if you have a temporary stop in supply to your business?

Your remedies will depend on what has happened, why there has been a stop to your supply, and the nature of damage caused to your business.

If you have failed to pay invoices owed, then you should try to reach agreement with the supplier to pay your outstanding bills, asking for a time to pay agreement with them. They can be amenable to requests if you are facing financial difficulties, but you must maintain communication with them.

If there is a disruption in supply because of a dispute over your invoice, then it is essential that you resolve the dispute as soon as possible. If it transpires that it is not your fault, then not only can we help you to be reconnected, we can also claim money on your behalf to cover losses that your business may have incurred due to the disruption.

If there has been damage caused by energy supply itself, either yours or a neighbour’s, for example through fire, or by a renewable energy infrastructure going up over your land and causing disruption, then this can be a complex area and requires legal assistance through a solicitor with relevant experience.  It will be necessary to raise the matter with the energy provider and set out the damage caused and the ways you wish them to rectify it. If agreement cannot be reached, then we can assist in putting together a case on your behalf to the Energy Ombudsman, or if necessary, the court.

The Energy Ombudsman provides a service that aims to resolve disputes between consumers and suppliers in the energy sector.  However, they can be slow, and every day you suffer with a disrupted supply can have a serious impact on your business.  We can assist by liaising with the energy supplier, liaising with the Energy Ombudsman on your behalf, and any other third parties as necessary.  If you have no satisfactory fast recourse using those routes, we can take a case to court on your behalf to allow a court to decide how to resolve a dispute.

How can we help?

Energy providers and contractors can be hard to deal with, however it is essential that you resolve matters with energy suppliers as quickly and painlessly as possible.

We have many years of experience in dispute resolution and can advise you and deal with large supply companies to restore matters to allow you to continue with your business. Contact us as soon as you are aware of a potential problem.

For further information and assistance, please contact a legal advisor in our Dispute Resolution team on 01904 624185.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.