Guide / Choose
Understand the energy contract you are actually buying
A contract label is only the beginning. Separate the procurement route, supply term, pricing method and service package so the school can compare its choices on the same basis.
Start with four separate decisions
A framework is a way of procuring a contract. A fixed rate is a way of pricing it. Three years is a period of supply. Invoice checking is a service. These decisions interact, but they are not interchangeable. A broker may support a framework contract or a separately conducted procurement; using a broker does not establish procurement compliance by itself.
First establish the route your organisation can use. Then agree the supply period, pricing approach and support needed. Gas and electricity may require different decisions. The right choice should reflect the school's finances, consumption, buildings and capacity to manage risk, rather than a claim that one product always beats another.
Compare the main pricing structures
DfE energy guidance distinguishes fully fixed, fixed and variable or flexible arrangements. Names differ between providers. Ask for a charge schedule showing what is fixed, what can change, and the clause permitting each change. The signed terms take priority over the sales label.
| Structure | What the school is buying | What to examine |
|---|---|---|
| Fully fixed | Specified commodity and non-commodity charges fixed for the agreed period. | Excluded items; tax or legal changes; consumption tolerances; metering and capacity charges. |
| Fixed commodity with pass-through charges | The energy component is fixed while identified other charges can change. | The exact pass-through schedule, calculation, evidence and budget sensitivity. |
| Flexible or structured | Energy is purchased in portions under an agreed strategy. | Trading authority, purchased and exposed volumes, risk limits, reporting and fees. |
| Managed basket | Demand is bought alongside other customers under the provider's rules. | How trades and costs are allocated, entry and exit, reporting and school control. |
| Variable | Rates can change during the arrangement. | The price formula, notification, exit conditions and potential budget exposure. |
Fixed rates still need a realistic budget
A fixed unit price does not fix the amount of energy the school uses. A colder winter, extended opening hours or a new building can increase the bill. Solar or efficiency improvements may reduce imports. Standing charges and contractual adjustments can also affect the total.
Build a central consumption forecast and test plausible higher and lower usage. Keep the same assumptions when comparing offers. Ask what happens if actual demand differs materially: minimum-volume, take-or-pay, tolerance and reconciliation clauses can change the economics. These checks matter particularly where a supported operating change alters the future requirement.
Flexible purchasing requires clear authority
A flexible strategy spreads purchase decisions; it does not remove market risk or guarantee savings. Before joining, obtain a plain-language explanation of who buys, when they may act, the limits of that authority, and how the school will see its position.
The governing body or trust board should understand the consequences of prices increasing before remaining energy is purchased. Request sample reporting that distinguishes bought volumes, unbought exposure, forecast consumption and estimated final cost. A dashboard is useful only if someone is responsible for interpreting it and taking action.
Recognise expiry and acceptance risks
Ofgem distinguishes deemed supply, out-of-contract rates and automatic renewal. Do not assume every expired arrangement has the same status or exit rules. Check the actual contract, notice requirements and replacement start date. Record both the supplier's and the TPI's termination provisions.
Do not rely on a domestic-style cooling-off period. Business energy agreements commonly have none, and acceptance may be binding before a paper signature. Agree who can accept, require written offers and ensure the authorisation process covers telephone or digital acceptance. Quote expiry should be visible, with a pre-agreed process for refreshed prices.
Make each quotation answer the same questions
- Which legal entity, sites, meters, fuels, consumption and supply dates are covered?
- What are the unit, standing, capacity, metering, service and broker charges?
- Which taxes, levies and other charges are included, excluded or variable?
- What volume obligations, credit conditions, deposits and termination costs apply?
- What changes if a site closes, joins the trust, installs solar or changes heating?
- What happens at renewal, and which services continue after supply starts?
Turn the comparison into a decision
Produce a short recommendation showing comparable forecast cost, remaining uncertainty, service differences and reasons for the chosen risk position. Attach the full terms and evidence separately. The decision-maker should be able to explain the selection without becoming an energy trader.
An energy supply contract does not guarantee uninterrupted physical supply. Switching changes commercial arrangements. Power cuts and gas emergencies require the relevant network and emergency processes. Keep operational continuity planning alongside procurement, with clear contacts and escalation responsibilities.