Compared to What?

How business energy renewals happen when no one publishes the market rate.

Last week I spoke to a business owner who had just renewed their electricity contract. It doesn’t start until April. They signed it earlier that week. While we were on the call, I pulled up comparable market offers available that morning. The rate they had locked in for April was higher than several of them. Not catastrophically higher. But clearly. Before the new contract had even begun, it was already off the pace.

I asked what they had compared it to. There was a pause. Their broker had called and walked them through the options. Prices were moving. The quote was valid for a couple of days. It was lower than what they were paying last year, which felt like progress. Lock something in, remove the uncertainty, move on. There was no shopping around, no internal discussion, no quick search to see where the wider market sat. The contract was signed.

Most financial decisions come with some sense of where the market sits. If you take out a mortgage, you know the Bank of England base rate and roughly where two-year fixes are trading. Insurance renewal letters now show last year’s premium, and comparison sites let you see a range of quotes within minutes. Even petrol has a large number on a forecourt sign. Consumer energy has the Ofgem price cap and published unit rates. You may not secure the absolute cheapest option in any of these markets, but you understand the territory before you sign.

Business energy renewals are different. You can negotiate. You can use a broker. You can rely on experience. But there is no widely published number that tells you roughly where the market sits today for a business like yours. No official renewal index. No reference rate quoted in the financial press. No shared coordinates before you commit.

That absence matters because of how renewals actually happen. In theory, energy is a fixed cost, a line on a profit and loss statement. In practice, renewal windows are short, quotes expire quickly, and direct debits leave the account without ceremony. Finance sees aggregate spend, not the unit rate buried in the contract schedule. Senior leadership rarely reviews per-kilowatt-hour pricing unless something has gone badly wrong. Energy is important, but it is rarely urgent until it is.

When renewal approaches, the decision is usually tactical rather than strategic. A call is taken. A spreadsheet is opened. A deadline is mentioned. The new rate is compared to the old one, and if it is lower, that feels like progress. The comparison rarely goes further than that. Lower than last year is not the same as aligned with today. In the absence of a published benchmark, the decision rests largely on trust — trust in the broker, trust in the supplier, trust that the reduction is meaningful. Trust works in relationships. Markets tend to work better when there is a shared reference point.

The way the market is set up makes this harder than it needs to be. Brokers operate in a competitive environment and suppliers price dynamically. Broker margin can be built into the unit rate itself. Recent court judgments have unpacked how those margins are sometimes embedded within headline prices. Ofgem surveys suggest many businesses are unsure whether they pay broker fees at all. The issue is not that every renewal is inflated. It is that outcomes vary, and without a public reference point, it is difficult to know where yours sits.

In markets where there is a published reference point, outliers tend to reveal themselves. If mortgage rates sit around a certain level, an offer far above it prompts questions. If fuel prices spike nationally, drivers notice. A shared benchmark does not eliminate negotiation. It anchors it. In business energy renewals, that anchor is largely absent. You can still negotiate. You can still take advice. But you cannot easily tell whether you are broadly in line with the market or quietly drifting away from it.

The absence of a reference point became more obvious to me when we started reconfiguring energy for customers. We could optimise tariffs and adjust structures, but when a client asked, “How much have you saved us?”, we ran into a basic problem. Saved compared to what?

Compared to last year’s rate? Compared to whatever their broker happened to secure? Compared to a hypothetical best case that no one could actually buy? Without a visible market anchor, the counterfactual becomes slippery.

So we built a simple tracker. We survey the market, filter out the extremes, limit it to one offer per supplier, take the five keenly priced contracts available at that moment, and average them. We then select a real, executable contract within that group so the number is not theoretical. You can actually buy something close to it. It does not predict wholesale movements or capture every nuance of usage. What it provides is orientation.

There are reasonable objections to this approach. The keenest five contracts at any moment may reflect suppliers pricing aggressively to win volume. Many small businesses purchase through brokers who add margin, so a clean market index may sit below the rates typically transacted in practice. Regulation is evolving, and greater disclosure may narrow some of these gaps over time.

All of that may be true. An index like this does not claim to represent every deal in the market. It does not guarantee that a given renewal is unfair simply because it sits above it. What it does is provide a shared point of orientation in a market that otherwise lacks one.

In most markets, even an imperfect benchmark is better than none at all.

I keep thinking about that April contract. It is signed. It will begin soon. The business owner did not act recklessly. They responded to a deadline, took advice, secured a lower rate than last year, and returned to running their company. That is how most renewals happen.

The question is not whether the rate was outrageous. It is whether decisions of this size should be made without shared coordinates. Without a published reference point, “lower than last year” becomes the default test of success.

Markets can function like that. People can rely on experience and trust. But when no one publishes where the market roughly sits, the burden of navigation falls entirely on the buyer.

And when last year’s price is the only reference point, it is hard to know what “saved” actually means.