UK businesses are being advised to consider longer-term fixed-price commercial electricity contracts instead of cheaper 12-month deals, according to an energy price comparison specialist. The Energy Advice Line said that while two and three-year energy contracts were generally more expensive in the short term, “significant” savings were likely to be made over the longer term as business energy prices are expected to continue rising. Julian Morgan, managing director of the company, said most firms opted for fixed-term contracts of one year because they were cheaper than two or three-year deals, yet they risked losing money by doing this. Looking at 1, 2 and 3 year fixed deals available to commercial customers at the beginning of last year and the rate of increase of energy costs over the past year The Energy Advice Line were able to conclude that even though the longer term deals were fixed at higher prices customers stood to make substantial savings by signing up to the longer deals rather than taking the shorter deals and looking for a new deal now. In theory it makes sense that the longer the term of the contract the cheaper the cost should be, it is significantly more beneficial for energy firms to have a commercial customer stay with them for, say, 3 years than to have them stay for only one year and then switch to another provider. However within that fixed price the energy companies need to accommodate the rapidly rising cost of producing that energy, so we end up with a situation where the 'cheaper' option actually looks more expensive in terms of cost per kilowatt hour. It illustrates how important it is to look beyond the snapshop of percentage difference between cost per kilowatt hour now and also look at the rate of change of cost to see where you might be in a years time or 2 or 3 etc. Other ways companies can look to save on their energy bills include bulk buying energy. A number of schemes like this one at Crystal Palace Chamber of Commerce are being set up to allow companies to band together and buy energy in bulk, which allows them to negotiate a discount that all businesses in the scheme benefit from.