ACS has called on energy regulator Ofgem to ensure that local shops and other small businesses are included in proposals to limit back-billing of electricity and gas. Currently, suppliers have signed up to voluntary agreements to only back-bill domestic consumers for a maximum of 12 months. Ofgem is looking at whether to introduce licence obligations for suppliers, due to the regulator stating that: “We are not confident that the principle is being applied consistently across the market and are concerned that not all suppliers have appropriate back-billing arrangements in place.”
In an open letter from October 2012, Ofgem stated that: “Our analysis of the information from our request does not suggest that any particular supplier or set of suppliers is disproportionately impacted by moving to a limit of one year.”
ACS has been campaigning for several years to reduce the back-billing limit for small businesses to one year, in line with that of domestic consumers, and has worked with Ofgem, the All Party Parliamentary Small Shops Group and 10 Downing Street to stop excessive back-bills being issued to small businesses. However, the current non-domestic back-billing limits still range from anything up to five years depending on the supplier.
ACS chief executive James Lowman said: “For a retailer, an unexpected back-bill worth thousands of pounds can be a threat to their business. Many energy suppliers have taken positive steps to reduce the impact of back-bills by limiting them to 12 months, as is the case in the domestic sector. However, a number of energy companies still refuse to change their policies and this is simply unacceptable. We believe that local shops and other small businesses should be protected by the same standards of conduct that govern supplier interaction with domestic consumers, and that Ofgem should act swiftly to introduce a licence condition to limit back-billing to a maximum of 12 months.”