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Importance of Credit Rating When Shopping for Energy Retailer

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Credit rating. Two words that make some of us cringe. However, don’t ignore these two very important words if you run or help run a business and are considering entering into a gas, power or services contract with an energy retailer such as Direct Energy Business. It is imperative that you review the credit rating of that retailer.

A credit rating is an evaluation of the credit worthiness of a business that generally ranges from AAA all the way down to D. The evaluation is made by an independent credit rating agency and is a measure of a business’ ability to meet its performance obligations.

Once you have signed an energy contract, usually lasting anywhere from six to 60 months, your business will depend upon your chosen retailer to meet its performance obligations and deliver the gas, power or services on time at the agreed upon price. You want to enter into a partnership with a retailer that you can trust and you will want to ensure that your energy partner is available when you need them.

If you sign a contract with an energy retailer that has a poor credit rating, you run the risk that the energy retailer becomes insolvent during a difficult time. If wholesale prices have increased since you signed the contract with the now defunct energy retailer, you will have to find a replacement energy retailer at the now higher prices, costing you time, money and frustration.

I am proud to share that Direct Energy (DE) is a wholly-owned subsidiary of Centrica in the UK. DE carries the support, resources and experience of a publicly traded, multinational energy group with a market capitalization of approximately US$33 billion. DE’s financial strategy is designed to be prudent, consistent with its overall business strategy and flexible to respond to sudden unexpected changes in the economic environment. All these factors have allowed DE to maintain a single A credit rating.

These are some things to be on the lookout for when exploring your energy supplier options. The last thing you want is for the lights to shut off unexpectedly at your business.

Posted: October 23, 2013