Energy regulator Ofgem has confirmed that it will push ahead with plans to make the energy market fairer for business customers.
The new rules are the result of Ofgem’s Retail Market Review, which ACS has been heavily involved with since its original publication in 2011. Over that time, ACS has been calling for local shops to have the same protections as domestic customers when dealing with energy companies.
As part of the announcement, a group of suppliers have committed to limit backbills for convenience stores and other microbusinesses to one year, no later than 2014. These suppliers are British Gas, Dong Energy, Dual Energy, EDF Energy, Eon, Npower, Opus, Scottish Power and SSE.
Ofgem’s announcement today covers the following proposals:
• Widening the definition of ‘micro business’ to include more (based on a higher consumption cap of 293,000kWh in gas and 100,000kWh in electricity, equating to about £10,000 spend on each fuel);
• Requiring that suppliers put contract end dates and the date by which they need to serve notice to terminate on micro business customers’ bills;
• Allow businesses to give notice that they want to terminate their contract (at the end of the term) at any time until the latest notice period date;
• Assessing whether or not to ban contract rollovers;
• Puting in place enforceable standards of conduct supply licence conditions for micro businesses, covering contracts, transfers and billing, which will be able to address back-billing;
• Increase monitoring of suppliers’ behaviour when customers want to switch supplier.
ACS chief executive James Lowman said: "Today’s announcement is a welcome step forward for our members, who have been subject to excessive and damaging backbills for too long. We have been campaigning for a 12-month limit on backbilling for several years, so are pleased that a number of energy companies have made a commitment to work to this limit in 2014. However, these standards should apply across the industry and we urge all other suppliers to follow suit.
"The extension of legal protections to more independent convenience store operators is a hard won concession and the new rules on transparency and switching will make a difference for retailers. We will continue to work with Ofgem to deliver a regulatory framework that makes the energy market fairer and reduces costs on everyday entrepreneurs.”