Business energy guide

What is a deemed energy contract for businesses?

A deemed energy contract usually applies when a business begins using gas or electricity at a property without agreeing a formal fixed contract with a supplier. It is common after moving premises, taking over a site or discovering that no active supply agreement has been arranged.

Last reviewed: 15 May 2026

Part of the CNG Switch Business Energy Guides library for UK businesses that want clearer supplier visibility, billing understanding and adviser-led energy support.

Quick answer

A deemed business energy contract is a supplier arrangement that can apply when a business uses energy at a property without having a formal fixed contract in place. The supply continues, but the supplier may apply deemed rates until a formal contract is agreed.

Deemed contracts are often linked to new occupier situations, tenancy changes, site takeovers and property moves. Businesses should check the supplier, meter readings, MPAN or MPRN details and current rates as early as possible.

What is a deemed business energy contract?

A deemed contract is a supplier arrangement that allows energy supply to continue where no agreed fixed contract currently exists. The business is still receiving electricity or gas, but the commercial terms may not be the same as a negotiated fixed agreement.

This often happens when:

• A business moves into new premises.
• A tenancy changes.
• A site changes ownership.
• No supplier agreement has yet been arranged.
• An existing contract has ended unexpectedly.
• A business takes over a unit, office, warehouse, shop or hospitality venue.
• Supplier records have not been updated after an occupier change.

The business continues receiving electricity or gas, but the supplier applies deemed pricing until a formal contract is agreed or the supply position changes.

Why do deemed contracts exist?

Energy supply must continue safely even if formal contractual arrangements are not yet finalised. Deemed contracts provide a supply structure so a business is not left without gas or electricity simply because a formal agreement is absent.

That can be useful during property transitions, but it should not be ignored. Deemed pricing structures are usually supplier-set rather than planned around the business’s operational profile.

This is why deemed contracts are often a visibility issue. The business needs to understand who supplies the site, what rates are being charged and what steps are needed to move into a clearer arrangement.

When do businesses usually end up on deemed rates?

Deemed rates often appear during practical business changes. The business may be focused on opening, trading, relocating staff or fitting out premises, while the energy supply position sits in the background.

Common situations include:

• Moving into a new commercial property.
• Acquiring additional premises.
• Lease changes.
• Supplier confusion during occupancy transitions.
• Failure to arrange a new agreement promptly.
• Unclear ownership or tenancy information.
• Taking over a site where the previous occupier’s details remain on supplier records.
• Opening a new unit before contract paperwork has been completed.

Businesses sometimes assume energy contracts automatically transfer between occupiers. In practice, supplier arrangements often require formal setup processes, accurate opening meter readings and clear site details.

Related guide: why businesses should review energy contracts before expanding.

Are deemed rates more expensive?

Deemed rates are often higher than proactively reviewed business energy agreements, although pricing structures vary between suppliers. The exact position depends on the supplier, property, meter setup, usage profile and how long the account remains on deemed terms.

Businesses on deemed contracts may experience:

• Higher unit rates.
• Higher standing charges.
• Less pricing certainty.
• Variable supplier-set structures.
• Unexpected invoices after moving premises.
• Difficulty budgeting if the position is not reviewed promptly.

This is why businesses moving premises should arrange supply contracts as early as practical and review the first invoices carefully.

Related guide: understanding business energy standing charges.

How deemed contracts differ from out-of-contract rates

Deemed contracts and out-of-contract rates are often confused because both can involve supplier-set pricing where a fixed contract is not in place. However, they usually apply in different situations.

Deemed contracts

• Typically apply where no formal agreement exists at a property.
• Common during occupancy changes or new site setup.
• Often linked to new occupier, tenancy or property transition situations.
• Usually require the new occupier to establish the correct supply position.

Out-of-contract rates

• Usually apply after an existing contract expires.
• Often affect existing business customers.
• May follow missed renewal or contract expiry periods.
• Can indicate that a fixed agreement has ended without a new one in place.

Both situations can create higher pricing exposure if contract visibility is poor. The latest bill, supplier correspondence and meter details should be checked to confirm which position applies.

Related guides: what are out-of-contract business energy rates? and out-of-contract business energy rates explained.

Why contract visibility matters during site changes

Businesses moving premises often focus heavily on operational priorities. Energy arrangements are sometimes handled later, increasing the risk of deemed pricing exposure lasting longer than expected.

During a move, businesses often focus on:

• Staff relocation.
• IT infrastructure.
• Customer continuity.
• Lease agreements.
• Operational setup.
• Equipment installation.
• Fit-out and opening timelines.

Energy visibility should sit alongside those operational priorities. If supplier records, meter readings or occupancy dates are unclear, billing issues can appear after the business has already started using the site.

Businesses operating across:

• Retail locations.
• Hospitality venues.
• Warehouses.
• Office premises.
• Manufacturing sites.
• Care homes.

often face additional complexity when multiple sites, meters or suppliers are involved.

What businesses should check when moving into new premises

Businesses moving into a new property should confirm the energy position as early as possible. A clear opening record can help reduce supplier confusion and billing problems later.

Businesses should confirm:

• Who currently supplies the site.
• Whether an active contract exists.
• Current opening meter readings.
• Electricity MPAN and gas MPRN details.
• Meter serial numbers.
• Contract start arrangements.
• Occupancy dates.
• Billing address and site address.
• Whether previous occupier details remain on supplier records.
• Whether electricity and gas are supplied by different suppliers.

Early visibility helps reduce the likelihood of supplier confusion or deemed pricing remaining in place longer than expected.

Related guides: what is an MPAN number? and what is an MPRN number?.

How different businesses are affected

The impact of deemed pricing often depends on operational energy demand. Higher supplier-set pricing can become commercially significant quickly where usage levels are substantial.

• Hospitality businesses may require immediate operational energy supply during opening periods.
• Care homes require continuous operational energy availability.
• Manufacturing businesses may have significant demand from machinery or production processes.
• Warehouses may depend heavily on lighting, refrigeration or heating systems.
• Retail businesses may move into stores where supplier arrangements are unclear.
• Office-based businesses may inherit supply arrangements during occupancy changes.

How businesses can improve deemed contract visibility

Businesses can reduce deemed contract exposure by keeping property, supplier and meter details organised before and during site changes. The aim is to avoid discovering the issue only after invoices have arrived.

Useful steps include:

• Taking opening meter readings on the occupancy date.
• Confirming the supplier for electricity and gas.
• Recording MPAN and MPRN details.
• Keeping lease start dates and handover dates clear.
• Reviewing the first invoices carefully.
• Checking whether deemed, default or variable wording appears.
• Centralising site-level records for multi-site businesses.

Related guide: how to read a business energy bill.

Why adviser-led reviews matter

Business energy supply arrangements can become complicated during property transitions, especially where multiple suppliers are involved, several sites exist, occupancy dates overlap or supplier records are outdated.

Adviser-led reviews help businesses improve visibility across:

• Current supply arrangements.
• Contract structures.
• Meter information.
• Supplier communication.
• Renewal and rollover exposure.
• Deemed, default or out-of-contract indicators.
• Site-level billing records.

The aim is to help businesses understand their operational energy position clearly rather than reacting after invoices arrive unexpectedly.

CNG Switch is not a comparison website or instant quote platform. Our adviser-led approach focuses on contract visibility, operational understanding, billing clarity and business energy support.

FAQs

Moving premises or unsure about your energy contract?

If your business has recently moved premises, taken over a site or your current contract position is unclear, CNG Switch can help review your setup and explain the next steps clearly.

The review focuses on supplier visibility, meter details, billing structure, deemed rate exposure, contract timing and whether your current setup reflects how the business operates.

No guaranteed savings. Available options depend on supplier criteria, usage profile, contract timing, meter details, site position and business circumstances.