Ofgem is proposing new rules to help to Britain’s smallest businesses – around 1.6 million customers - when they are shopping around for energy deals.
The rules will require suppliers to make price comparisons easier by including the price of the customer’s current deal, as well the new rates that their supplier will charge after the end of the current contract.
Suppliers must also tell each business how much energy it uses annually, so that they have all the information they need to compare their supplier’s prices with the rest of the market. This puts customers in the best possible position for negotiating a new deal when their current contract ends.
All suppliers will have to use a standard 30 day notice period, so businesses know when to tell their supplier that they want to switch.
Suppliers will also have to acknowledge all notices given by businesses to say they want to terminate their contract when their deal ends, within five working days of receipt.
Ofgem has today published a statutory consultation on the expected legal wording of the rules. This is the final opportunity for stakeholders to comment on the changes. Ofgem will publish its final decision this autumn. Subject to the outcome of the consultation and provided there are no appeals by the industry to the Competition and Markets Authority, the 30 day notice period and requirements for acknowledging termination notices are expected to apply from 31 Dec 2014. It is expected that the rules on price comparison and consumption will come into force in March 2015.
Ofgem has already brought in tough standards of conduct so businesses get fairer treatment from their supplier, or risk facing fines. Since March 2014 around 160,000 more small businesses have benefitted from Ofgem’s rules for supply to business, which ensures they get clearer information on their contracts. All bills for the smallest business also now have to show the contract end date, so customers are prompted to think about comparing the market. The regulator will publish additional guidance for small businesses to help them manage the process of contract renewal.