Energy regulator Ofgem has announced its intention to extend protections afforded to ‘micro businesses’ to thousands of additional small businesses, signalling a victory for a key part of the Association of Convenience Store’s ‘Switch to a Fair Energy Market’ campaign.
The proposals set strict rules for the information that energy and gas suppliers must provide, extend protections to allow retailers maximum flexibility in giving notice to end an existing contract, and to make it mandatory that the end date of a contract is printed on every bill provided by the supplier.
These measures, which are now subject to consultation, mean that any business paying approximately £10,000 a year on either electricity or gas will be covered by the legal protections.
ACS chief executive James Lowman said: “This is an important step forward – Ofgem has recognised that basic standards of information and transparency in energy contracts should be afforded to all small businesses not just micro businesses, a key demand of our campaign.
“However we are concerned that in making this step they have not gone far enough. Crucially the enforcement of these provisions will not include recourse to the Energy Ombudsman for non-micro businesses.”
The consultation does not cover two further key demands of the ‘Switch to Fair Energy Campaign’ that are vital to promote a market that works for small businesses:
1. a complete end to automatic rollover of energy contracts – whereby an energy company can impose new binding contracts, including new tariffs, for up to one year after the end of a contract and;
2. a strict limit to the period that can be subject to a back bill to one year. The limit is currently seven years.
Lowman said: “Ofgem are clearly aware of the problems in this market and we will continue to work with them to make progress. However the pace of change is still too slow. They must take action, especially in the more controversial areas, to promote competition, fairness and support for small businesses.”