The Business Energy Change of Tenancy (CoT) Guide: Avoiding Moving-In Pitfalls

What Is a Business Energy Change of Tenancy?

A business energy change of tenancy is the formal process through which responsibility for a commercial electricity or gas supply transfers from one occupant to another when premises change hands.

It is one of the most financially consequential administrative tasks associated with any commercial move, and it is consistently underestimated by business owners who assume energy follows the same process as domestic property transfers.

It does not!

The fundamental difference between commercial and domestic energy moves

When a domestic tenant moves home, energy suppliers have established processes for managing account transitions and the regulatory framework provides a degree of consumer protection during the changeover period.

Commercial energy operates under different rules entirely.

A business energy change of tenancy does not trigger any automatic transfer of the previous occupant’s contract to the incoming tenant.

The incoming business has no obligation to honour the terms, the tariff or the supplier of the outgoing tenant.

Equally, the incoming business receives no grace period, no transitional tariff protection and no automatic Ofgem price cap equivalence during the period between move-in and new contract arrangement.

What the incoming tenant does receive automatically, from the first moment energy is consumed at the new premises, is a deemed rate tariff.

Deemed rates commercial electricity charges are the most expensive tariff structure available in the UK commercial energy market, and they begin accumulating from day one of occupation without any action required by either the outgoing or incoming tenant.

Understanding this dynamic before keys are handed over is the single most important preparation any business can make when moving premises.

Why business energy change of tenancy matters more than most businesses realise

Every day on deemed rates commercial electricity represents an overpayment of between 50% and 70% above a competitively procured fixed-term rate.

For a small business consuming 20,000 kWh of electricity annually, that premium translates to an additional cost of between £2,597 and £3,571 per year compared to an independently negotiated fixed contract.

Unlike billing errors that can sometimes be recovered retrospectively, deemed rate overpayments are permanent.

The only action that stops the financial exposure is arranging a formal supply contract with a chosen supplier as quickly as possible after move-in.

A correctly managed business energy change of tenancy eliminates this exposure entirely by having a new fixed-term contract in place from the day of occupation.

---

The Deemed Rate Trap

Deemed rates commercial electricity is the tariff applied by the incumbent supplier at a property when energy is consumed without a formal supply agreement in place.

When the previous tenant vacates and their account is closed, the supplier connected to that meter does not disconnect the supply.

Instead, they continue supplying electricity and gas and apply their deemed tariff to all consumption by whoever occupies the premises.

The incoming business did not agree to this tariff.

They did not sign any contract.

They may not even know who the incumbent supplier is.

None of that changes their liability for deemed rates commercial electricity from the moment they begin consuming energy.

How deemed rates commercial electricity is priced

Deemed rates reflect the maximum commercial discretion available to a supplier in the absence of any formal agreement or competitive procurement.

They are set to compensate the supplier for the administrative risk and uncertainty of supplying an unknown occupant without consumption history, credit assessment or agreed payment terms.

In practice, deemed rates commercial electricity unit rates in September 2026 range from 42p to 50p per kWh for electricity and 14p to 18p per kWh for gas at most major suppliers. Compare those figures to the competitive market:

Based on September 2026 market data. Figures are illustrative estimates.

The compounding cost of delayed action

Every week of delay in resolving a business energy change of tenancy compounds the deemed rate exposure.

For a medium-sized business consuming 40,000 kWh of electricity annually, one month on deemed rates commercial electricity costs approximately £1,900 more than a competitive fixed rate would.

Three months costs approximately £5,700. Six months costs approximately £11,400.

These are not recoverable sums. They are costs incurred permanently through administrative delay.

Your right to switch immediately

The one positive aspect of deemed rates commercial electricity is that they carry no contractual lock-in.

There is no fixed term, no notice period requirement and no exit fee.

An incoming tenant on deemed rates can instruct a new supplier and initiate a switch from the first day of occupation.

Under Ofgem’s Faster Switching scheme, the technical switch process completes in 5 working days from the agreed start date.

Upload a copy of your new lease document or your first deemed rate bill to Kilowatt Energy and we will run an independent business electricity comparison across 30 plus suppliers to replace your deemed rate exposure with a competitively procured fixed contract immediately.

---

Moving Out vs Moving In: 

---

The Step-by-Step Moving Checklist 

Managing moving business premises utilities correctly requires action at three distinct stages.

Before the move, on move-in day, and within the first week of occupation.

Before the Move: Preparation

Identify the incumbent supplier at the new premises

Before you take occupation, establish who currently supplies electricity and gas to the new premises.

Your commercial letting agent or property solicitor should be able to provide this information.

Alternatively, for electricity you can contact the relevant Distribution Network Operator for your area and provide the property address.

For gas, contact Xoserve or the National Gas Emergency Service who maintain the national gas meter register.

Knowing the incumbent supplier before move-in day prevents any delay in notifying them of your arrival and initiating the process of replacing deemed rates commercial electricity with a competitive contract.

Obtain the MPAN and MPRN numbers

The MPAN (Meter Point Administration Number) is the unique 13-digit identifier for your electricity supply point.

The MPRN (Meter Point Reference Number) is the equivalent for gas.

Both are essential for any business electricity comparison or supplier switch. You can request these from the incumbent supplier, from your landlord or from the DNO directly.

Moving business premises utilities without knowing your MPAN and MPRN delays every subsequent step in the procurement process. Obtain both before your lease commencement date.

Assess your energy consumption requirements at the new premises

The new premises may have a materially different energy consumption profile to your previous location.

Differences in size, insulation, existing equipment, heating systems and trading hours all affect your expected annual kWh consumption.

That consumption profile directly determines which suppliers and which tariff structures are most competitive for your specific circumstances.

Before running a business electricity comparison for the new premises, establish as accurate an estimate of your likely annual consumption as possible.

Your broker can assist with this using data from the existing meter and the property’s historical consumption records if available.

Issue a Letter of Authority to your chosen energy broker

A Letter of Authority energy broker instruction is the document that authorises your broker to access meter data, contact suppliers on your behalf and obtain competitive quotes for your new supply address.

Issuing a Letter of Authority energy broker arrangement before your lease commences means your broker can begin market access and quotation processes immediately upon move-in, eliminating the administrative delay that extends deemed rate exposure.

The Letter of Authority must be on company letterhead, signed by an authorised signatory and must specify the new premises address, the MPAN or MPRN if known, and the scope of the broker’s authority.

Kilowatt Energy provides a standard Letter of Authority energy broker template that can be completed and returned digitally before move-in day.

On Move-In Day: Critical Actions

Take meter readings immediately

This is the single most important action on move-in day for managing moving business premises utilities.

Take a photograph of every electricity and gas meter at the property showing the reading and the meter serial number clearly.

Record the date and time. These readings establish the starting point of your consumption liability and protect you from any dispute with the incumbent supplier about energy consumed before your occupation.

Do not consume any energy before taking meter readings. Do not rely on the outgoing tenant, landlord or letting agent to provide these readings. Take them yourself on your first access to the property.

Contact the incumbent supplier immediately

Call the incumbent supplier’s business customer service line as soon as you have taken meter readings.

Identify yourself as the incoming tenant, provide your move-in date, your meter readings and your legal entity name. Request that they register you as the responsible party for the supply from your move-in date.

This call does two things.

It establishes your identity as the incoming occupant and prevents the supplier treating your premises as a vacant site.

It also formally starts the clock on your business energy change of tenancy notification, which is important for any subsequent dispute about deemed rate application periods.

Do not agree to any supply terms during the initial call

The incumbent supplier will typically attempt to sign you to a supply contract during this initial notification call. Decline.

The purpose of this call is to notify them of your occupation, not to agree a tariff. You are not obliged to take a contract with the incumbent supplier.

You are entitled to arrange a competitive contract with any supplier of your choosing from day one of occupation.

Agreeing to a supply contract with the incumbent supplier during this initial call without running an independent business electricity comparison is the commercial equivalent of accepting the first price offered on any significant procurement.

The competitive market almost always offers a better rate.

Within the First Week: Procurement

Run an independent business electricity comparison

With your MPAN, MPRN and move-in meter readings confirmed, your broker can now access the full competitive market and obtain live quotes from 30 plus suppliers for your new premises.

The business electricity comparison process for a new occupant is identical to the process for an existing business switching supplier.

The critical difference is urgency — every additional day on deemed rates commercial electricity is money permanently lost.

A business electricity comparison for a new premises typically produces live competitive quotes within 24 hours of submitting the MPAN, MPRN and consumption estimate.

Upload your lease commencement documentation or first deemed rate bill to Kilowatt Energy and we will complete this business electricity comparison on your behalf and present options the same day.

Confirm your VAT rate eligibility

Your new premises may qualify for a different VAT rate on energy than your previous location depending on the nature of the business use, the property classification and your annual consumption level.

Businesses consuming under 33 kWh of electricity per day at the new premises qualify for the 0% VAT rate on electricity from October 1st 2026. Charities and certain residential premise operators qualify for 5% VAT.

Confirm your VAT eligibility at the new address before your first contract is agreed. If your new premises qualifies for a reduced rate, submit the relevant VAT declaration form to your new supplier at contract commencement to ensure the correct rate applies from day one.

Check for de minimis VAT eligibility

For businesses moving into smaller commercial premises, the de minimis VAT threshold deserves specific attention.

If your new premises consumes less than 33 kWh of electricity per day or less than 145 kWh of gas per day, you qualify for the reduced VAT rate on the qualifying portion of your consumption.

This threshold is calculated per supply point rather than per business, meaning that moving to smaller premises can trigger new VAT savings that were not available at your previous location.

---

Working with Commercial Energy Brokers: 

For most business owners managing a commercial move, energy procurement is one task among dozens competing for attention simultaneously.

The operational demands of a premises change — IT infrastructure, fit-out, staff relocation, landlord negotiations, lease reviews — create conditions in which energy administration is consistently deprioritised until the first deemed rate bill arrives and makes the cost of that deprioritisation visible.

A Letter of Authority energy broker arrangement is the mechanism through which a commercial energy consultant assumes responsibility for all energy procurement administration on behalf of the incoming tenant, eliminating the requirement for the business owner to manage any aspect of the process directly.

What a Letter of Authority energy broker arrangement covers

The Letter of Authority energy broker instruction grants your broker formal authority to act on your behalf in the following capacities.

Accessing industry meter data systems to retrieve your MPAN and MPRN if not already known. Contacting the incumbent supplier to notify them of your business energy change of tenancy and establish your liability commencement date.

Obtaining live quotes from the full competitive supplier panel for your new supply address. Presenting a business electricity comparison across all available options. Managing the contract sign-up and switch process with your chosen supplier.

Liaising with the incumbent supplier regarding any deemed rate billing from the period between move-in and new contract commencement.

What a Letter of Authority energy broker arrangement does not cover

A properly drafted Letter of Authority energy broker instruction is specific and limited in its scope.

It does not grant your broker authority to sign supply contracts on your behalf without your explicit approval of each individual contract.

Any broker who claims their Letter of Authority enables them to commit your business to supply terms without showing you the contract first is operating outside the bounds of the TPI Code of Practice.

Kilowatt Energy’s Letter of Authority template is drafted to comply fully with TPI Code of Practice requirements.

It limits broker authority to quotation and recommendation activities only, with all final contract decisions remaining with you as the business owner.

We will present the business electricity comparison results and our recommendation. You decide whether to proceed.

The speed advantage of a pre-issued Letter of Authority

The most significant operational advantage of issuing a Letter of Authority energy broker arrangement before your lease commences is speed.

With the LOA in place before move-in day, your broker can begin meter identification, incumbent supplier notification and competitive quotation processes immediately upon your occupancy start.

In practice, this means a competitive fixed-rate contract can be in place and processing within 5 working days of move-in, limiting deemed rate commercial electricity exposure to the minimum technically possible period.

Without a pre-issued Letter of Authority energy broker instruction, the process of identifying meter details, issuing the LOA, obtaining quotes and selecting a contract adds a further 5 to 10 working days to the timeline.

At deemed rates commercial electricity levels, 10 additional days for a medium-sized business consuming 40,000 kWh annually represents approximately £630 in avoidable additional cost.

How to issue a Letter of Authority to Kilowatt Energy

Contact Kilowatt Energy by phone, WhatsApp or email with your new premises address and proposed move-in date.

We will provide our standard Letter of Authority energy broker form for completion.

Once returned, we begin market access and competitor analysis for your new supply address immediately.

You do not need to wait for your lease to be signed or for keys to be handed over.

We can begin preparatory market analysis as soon as we have your new address and anticipated occupation date.

The earlier you contact us in the moving process, the shorter your deemed rate exposure window will be.

Upload your lease heads of terms or any existing incumbent supplier welcome pack documentation for your new premises to Kilowatt Energy’s forensic audit service today and we will begin the business electricity comparison process immediately.

---

FAQs : Business Energy Change of Tenancy

Q: What is a business energy change of tenancy?
A business energy change of tenancy is the formal process of transferring commercial electricity and gas supply responsibility from an outgoing to an incoming tenant when business premises change occupant.

Unlike domestic property moves, commercial energy contracts never transfer automatically.

The incoming tenant has no obligation to the outgoing tenant’s supplier or tariff and is free to arrange a competitive new supply contract from day one of occupation.

Q: How long does a business energy change of tenancy take?
The notification process with the incumbent supplier can be completed in a single phone call on move-in day.

Arranging a new competitive fixed-term supply contract through an independent business electricity comparison typically takes 24 to 48 hours to produce live quotes and 5 working days for the switch to complete under Ofgem’s Faster Switching scheme.

With a pre-issued Letter of Authority energy broker instruction, the entire process from move-in to new contract commencement can be completed within one working week.

Q: Do I have to use the same energy supplier as the previous tenant?
No. As an incoming tenant you have no obligation to the previous occupant’s supplier, tariff or contract. You are free to arrange a supply contract with any licensed UK electricity or gas supplier from your first day of occupation.

Signing with the incumbent supplier directly without running an independent business electricity comparison typically results in paying above competitive market rates.

Q: What are deemed rates commercial electricity and how do I avoid them?
Deemed rates commercial electricity are the tariff automatically applied by the incumbent supplier when energy is consumed at a premises without a formal supply contract in place.

They represent the most expensive tariff available in the UK commercial energy market, typically 66 to 97% above competitive independently procured fixed rates. The only way to avoid deemed rates is to have a new fixed-term supply contract in place from the day of occupation.

A pre-issued Letter of Authority energy broker arrangement enables this to be achieved within 5 working days of move-in.

Q: What is a Letter of Authority and why do I need one for my commercial move?
A Letter of Authority energy broker instruction is a document that authorises your commercial energy consultant to access meter data, contact suppliers and obtain competitive quotes on your behalf. Issuing a Letter of Authority energy broker arrangement before your lease commences enables your broker to begin the business electricity comparison process immediately upon move-in, minimising your deemed rate commercial electricity exposure. It does not grant your broker authority to sign contracts on your behalf.

Q: What meter readings do I need to take on move-in day?
Photograph every electricity and gas meter at the property showing the full numerical reading and the meter serial number clearly. Record the date and time. For electricity, note the MPAN displayed on or near the meter. For gas, note the MPRN. Report these readings to the incumbent supplier on your first day of occupation as part of the business energy change of tenancy notification process.

Q: Can I run a forensic audit on my new premises if deemed rates have already been applied?
Yes. If you have received one or more invoices from the incumbent supplier at deemed rates commercial electricity levels, upload those invoices to Kilowatt Energy’s forensic audit service.

We review the billing for any errors in deemed rate calculation, meter reading methodology or VAT application.

If errors are identified, we pursue recovery on your behalf on a no-win no-fee basis alongside arranging your new competitive supply contract.o