---
title: Deemed and Out-of-Contract Energy Rates Explained
description: What deemed and out-of-contract business energy rates are, why they cost more, and how to get off them quickly.
---

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 Oct 16, 2026, 6:27:50 PM

# Deemed and Out-of-Contract Energy Rates Explained

[Peter Hallwood](https://utilitiesgroup.co.uk/blog/author/peter-hallwood)

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Deemed and out-of-contract rates are what you pay for business energy when you don't have a proper contract in place. They're usually much more expensive than a negotiated fixed deal, so the sooner you get off them, the better.

## What are deemed rates?

You go onto **deemed rates** when you use energy at a premises without agreeing a contract with the supplier. The most common reasons are:

- You've moved into new premises, such as taking on a pub, shop or office.
- You've taken over a business and the previous owner's contract has ended.
- A new supply has been connected and no contract was set up.

The supplier at the property supplies you on its deemed terms until you agree a contract with them or switch to someone else.

## What are out-of-contract rates?

You go onto **out-of-contract rates** when your fixed contract ends and you haven't agreed a new one or switched. The supplier keeps supplying you, but at its out-of-contract prices.

Some contracts also renew automatically onto a new term if you don't give notice in time. Always check your notice period.

## Why they cost more

- The rates aren't negotiated, so they're set by the supplier.
- They often have higher unit rates and standing charges than fixed deals.
- Many businesses don't notice for months, so the extra cost builds up.

## How to get off deemed or out-of-contract rates

1. **Find out who supplies your premises.** Check your bill, or ask your network operator using your MPAN (electricity) or MPRN (gas).
2. **Take meter readings.** Especially on the day you move in, so you don't pay for the previous occupier's usage.
3. **Compare suppliers.** You can usually switch away from deemed or out-of-contract rates without an exit fee.
4. **Agree a fixed contract.** Once it starts, you'll pay the agreed rates.
5. **Diary your end date.** Start comparing up to 12 months before your new contract ends so it doesn't happen again.

## Frequently asked questions

### Can I switch supplier if I'm on deemed rates?

Usually, yes. Because you haven't signed a fixed contract, there's normally no exit fee.

### How do I know if I'm out of contract?

Your bill may say "out of contract" or "variable", or show a contract end date that has passed. If you're not sure, ask your supplier or a broker to check.

### I've just taken over a pub. What should I do first?

Take meter readings on day one, find out who the supplier is and get quotes straight away. See our guide to [pub energy](https://utilitiesgroup.co.uk/pub-energy).

## Get off expensive rates quickly

Send us a bill or meter details and we'll check whether you're on deemed or out-of-contract rates and compare 15+ suppliers. [Get a business energy quote](https://utilitiesgroup.co.uk/) or call [0151 541 6767](tel:01515416767).

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