Switching Energy Suppliers - new reforms! - Maxwell Grant, Reduce Business Costs | Procurement Specialists, Salisbury
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February 27, 2014

Switching Energy Suppliers – new reforms!

Andrew Wright, Chief Executive of Ofgem has highlighted the problems that small businesses face when switching energy suppliers.  Ofgem’s Standards of Conduct has targeted this area along with billing and contracting so that confidence in the energy market can be restored.  These reforms come into force on 31st March this year so make sure your energy supplier implements these changes.

Andrew Wright continues:

“Our other reforms arm businesses with the key facts about their contracts and when they are coming to an end. This will make it far easier for them to compare the market. The onus is now on suppliers to make sure they stick to these standards and get their customer service right.”

The Standards of Conduct mean suppliers must act quickly to make amends when they have made a mistake, for example wrongly preventing a business from switching. They will also have to treat businesses fairly on back-billing and make sure that businesses are fully aware of contract terms and conditions.

We allow suppliers to have a notice period of up to 90 days before the end of a fixed-term contract, so that businesses can decide whether they want to negotiate a new deal or not.

However, to give businesses more time to compare deals, suppliers must now accept a termination notice from a business at any time before this. This change will come into effect at the end of March 2014.

From March 2014 suppliers will also be required to put the contract end date on all bills for businesses which typically spend up to £10,000** per fuel, per year. This will ensure these businesses know exactly when they should start comparing other offers in the market so that if they want to switch they could be ready to do so when their contract ends. In addition we are reviewing whether automatic rollover of contracts for small and medium sized businesses should be banned altogether. We expect to consult on our preferred option before the end of this year and reach a conclusion by the end of winter 2013/2014.

We have made clear that we will address the problem of rogue brokers that are misselling energy to businesses. We have already made the case to Government for more powers in this area. We are also working with brokers and suppliers to set up an industry-wide code of practice for brokers. This code will set out that brokers have to behave in a fair and transparent way to give businesses confidence when using their services.
*excluding VAT

To read the full article, go to:  https://www.ofgem.gov.uk/publications-and-updates/new-standards-conduct-suppliers-business-consumers

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