In order to address the issues faced by businesses in the non-domestic energy market, Ofgem has released a consultation document outlining a series of proposals aimed at making the market fairer and providing greater protections. Ofgem acknowledges the concerns raised by numerous reports, including difficulties in contracting with energy suppliers, poor customer service, and excessive price hikes. The regulatory body is resolute in its commitment to investigate misconduct and hold suppliers accountable for their actions.
Ofgem has identified three key areas where it is actively working to take action in the non-domestic market:
- Holding suppliers accountable for overcharging businesses not under contract by imposing excessive deemed rates.
- Sending a clear message to suppliers that it expects cooperation with businesses facing high fixed contracts signed in the second half of 2022, including measures to spread costs, reduce prices, and renegotiate agreements.
- Ensuring seamless energy contract switches resulting from changes in tenancy or occupier, without any unnecessary delays.
The consultation document put forward by Ofgem also proposes a range of changes to improve the non-domestic energy market’s fairness for businesses. These proposals encompass:
- Amending rules to require prompt responses to complaints and expanding the scope of conduct standards and access to the Energy Ombudsman, making them applicable not only to microbusinesses but to a wider audience as well.
- Introducing fairer deemed rates to prevent them from becoming unduly burdensome.
- Enhancing transparency on bills by providing businesses with a clear understanding of price changes and itemizing additional charges incurred from third-party intermediaries (TPIs).
- Extending TPI dispute resolution facilities to larger non-domestic customers, going beyond microbusinesses.
- Advocating for government regulation of the TPI market, which currently falls outside of Ofgem’s direct jurisdiction.
James Lowman, CEO of the ACS, expressed appreciation for Ofgem’s recognition of the need to expand customer protections to include more businesses and for the proposed regulation of the TPI market, although he highlighted the long overdue nature of these initiatives. Lowman emphasized the urgency of immediate action to ensure a competitive and fair energy market for all, particularly for businesses that entered into contracts during the peak of energy costs.
Lowman further noted that government assistance had been insufficient, and energy companies must do more to support businesses by offering solutions such as blending and extending contracts or providing early exit options.
The full consultation document, which can be accessed here, presents a comprehensive overview of Ofgem’s findings and policy recommendations. ACS has committed to responding to the consultation in due course.
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