Deemed Rates

Key takeaways

A deemed contract can apply when you move into premises and use energy before agreeing a contract, or when a contract ends and doesn’t say what happens next.

Deemed rates are set by the supplier, but Ofgem expects deemed terms and pricing not to be “unduly onerous” under supply licence rules.

If you’re on deemed, it’s usually worth arranging a proper contract as soon as possible.

What are deemed rates?

Deemed rates are the prices charged under a deemed contract.

Ofgem explains a deemed contract can happen if you:

1. move into a new business premises and use energy before agreeing a contract, or
2. your old contract expires and it does not say what will happen after it ends.

Why deemed rates are often higher

Suppliers price deemed rates to cover uncertainty and short-term supply risk.

Also, because you haven’t actively negotiated terms, you’re typically not getting a “market-checked” price.

Ofgem’s deemed contract guidance explains how it assesses whether deemed terms (including rates) are fair and not unduly onerous.

What to do if you’re on deemed rates

1. Identify your current supplier (from the bill, meter details, or landlord/agent info).
2. Agree a contract with that supplier, or switch to a new supplier.
3. If the deemed contract began due to moving in, do this quickly to avoid paying elevated default pricing longer than necessary.

Sources

1. Ofgem: Set up a business energy contract (when deemed contracts apply)
2. Ofgem: Guidance on Deemed Contracts (Ofgem’s approach to deemed terms/rates and fairness)