Leicester cafe owner fears closure as annual electricity bill set to rise by £45,000

A cafe owner in Leicester has hit out at the rise in electricity bill costs amid fears she will be forced to close her business.

Jan Gillbanks, who owns Five Fox Lane in the city centre, says she pays £10,000 per year for her electricity but that is set to rise to £55,000.

Five Fox Lane survived the pandemic but is now struggling to see a future as its annual electric bill is forecast to shoot up, with a fixed rate with Opus Energy expiring on 30 September.

Ms Gillbanks says she doesn't know whether she will have to reduce opening hours, cut down on staff or as a last resort close the business altogether.

She shared her dismay after receiving an email from her energy supplier who said her hourly rate would be going up from 15p per KWH to 81p per KWH. The owner called other energy companies and says all of the companies offered a worse deal to the one she is currently on.

She said: "Depending on the contract we go onto, it's £55,000 for a one-year contract, £49,000 a year if we sign up to a two-year contract, or £47,000 if we sign up to a three-year contract."Not a single company in Leicester would be able to pay such fees.

"It used to be £10,000 a year - so a £45,000 increase for the same energy is ridiculous."We're just getting over Covid, where the Government helped us a lot and supported us, but all of that will be for nothing if they don't address the energy bills for businesses.

"There isn't an energy cap for businesses and it's getting to the point now where it's just not sustainable."

Ms Gillbanks says that she has already looked into the expenses of cutting back but nothing would come close to the price increase.

She continued: "Even if we cut back on so many different things around the café, it would only cut off £5,000 from the bill. We've already had to increase our prices because of the increasing cost of ingredients.

"We now run the risk of closing down completely if we don't get additional support. It's such an exhausting situation to be in, it's taking up all of my energy and focus to try and sort something out.

"Our staff are anxious too because if we can't afford to stay open they're out of a job. Even if we make cut backs, some of them are out of a job.

"I don't have all of the answers. But an introduction of energy caps for businesses, and any other support the government or local councils can offer us the better."

Opus Energy is part of the Drax global group. A spokesperson from Drax told ITV News Central: "The war in Ukraine has resulted in global energy prices rising significantly, and this is having a serious impact on energy bills for everyone. 

"Previous price agreements for this business were at rates fixed several years ago before the recent upsurge in energy prices.

"As Ms Gillbanks is looking for a new contract, we can only offer her one based on current market prices.

"We understand the rise in energy prices is having an impact on businesses and are exploring ways in which we can further support them."

Five Fox Lane's general manager, Kylie Cracknell, echoes Ms Gillbanks's concerns. She said: "We don't want to put up our prices because other people's income aren't increasing either.

"We've had to shut off one of our walk-in fridges because it just costs too much. That means we have less stock to go around and before the end of the day we're running out of sandwiches and food for people to buy.

"That restricts what we can sell, and that means customers can buy less, and means even less money coming in. It's a catch 22."

Ofgem has announced that the energy price cap will increase by more than 80% to £3,549 from October 1 for households.

Other business in the Midlands have been affected by the rise in electricity rates.

Clare Ransom, who runs a team in Belper in Derbyshire, says it has got to the point that she is thinking of not paying her electricity bill.

She said the cost of energy is affecting her ability to run a business, as well as her own income.

"I don't take a wage anyway," she explained. "Yet again staff are going to have hours cut. But how long can I keep doing that? The business won't run without staff so where's the balance?

"There is no balance. We're kind of taking every day as it comes at the moment."