New OFGEM proposal on business protection
Ofgem has published today their proposals to reform the business energy market and provide businesses with better protection.
The four proposals are:
1. Add new standards of conduct to energy suppliers’ licences and give Ofgem the power to enforce them if they are breached. The aim is to ensure that suppliers and brokers are fair, honest and transparent in their dealings with businesses. Plus all sales and marketing activity to businesses will need to be accurate, not misleading and written in plain English.
2. Extend existing licence conditions which protect micro-businesses to cover businesses with less than 50 employees and an annual turnover of no more than €10 million. These rules will require suppliers to provide clear and transparent contract terms and conditions up-front and regulate how contracts can be rolled over.
3. Proposing a range of reforms to give businesses more protection from unfair sales practices. These reforms include an Ofgem accreditation scheme for Codes of Practice governing energy brokers, and new powers to take enforcement action directly against brokers for misleading marketing. (Ofgem currently has no direct powers to take enforcement action against energy brokers that only deal with business customers, so will request these new powers from government.)
4. Ofgem is currently reviewing whether suppliers are complying to licence conditions which are meant to ensure suppliers cannot unjustly frustrate businesses which want to switch to another energy supplier. Ofgem is considering enforcement action against some suppliers over this issue.
These proposals follow the Ofgem investigation, which found many businesses were concerned about over complicated and confusing terms and conditions, potential mis-selling by energy brokers and energy suppliers misusing their powers to block businesses from switching supplier.
See the original Ofgem press release here.
UES Energy strongly support anything that Ofgem does to improve transparency and competitiveness in the business energy market.
It’s also good to see market reforms for businesses; for many years the attention has been on what’s been happening to consumers, and this shows that Ofgem is prepared to address the tough issues in the business energy market too.
We strongly support the reforms for third-party intermediaries and brokers and believe self-regulation with the support of suppliers and Ofgem is the key here. UES Energy is a member of the Utilities Intermediaries Association (UIA) who has been calling for such support from Ofgem for some time. We also believe the same rules on marketing activity should apply to third party brokers and energy suppliers. If we want to build confidence in the energy market, businesses must feel sure they will be treated fairly, whoever they are dealing with.
These Ofgem proposals are a positive step in the right direction, however this is just the start of the journey to reforming the energy market in the UK.
