Ofgem proposals much-needed to deliver fairness in the energy market

Energy regulator Ofgem has announced proposals to expand protections for businesses in the energy market.

What was announced?

Following its review into the non-domestic energy market, Ofgem has announced the following proposals:

1
Standards of Conduct
Expand existing rules on Standards of Conduct to all businesses. Currently, these rules only apply to interactions with microbusinesses. This change will make clear that suppliers should put customers first and would also allow Ofgem to take action if an energy supplier does not behave well towards any customer, regardless of business size.
2
Brokers
Expand rules around transparency on what consumers are paying for Third Party services to all business consumers. Many non-domestic consumers use Third Party Intermediaries (TPIs) such as energy brokers to help find the best deal for the business – and many good energy brokers often play a valuable and vital role in helping businesses navigate the energy market with confidence.

Ofgem said that all customers should be clear on the costs of these services and the costs of their supply contract, so it is proposing to extend the requirement for energy companies to separately show the costs of using a broker to all businesses, not just micro-businesses.
3
Energy ombudsman
Ofgem is seeking views on expanding suppliers’ Complaint Handling rules and requiring signposting to support services. These changes support the proposal set out by the Government to give Small Businesses with fewer than 50 employees the ability to take complaints about energy suppliers that they cannot resolve with them to the Energy Ombudsman. Currently only ‘Micro Businesses’ can take disputes to the Energy Ombudsman.

Our response

Our Chief Executive Kate Nicholls said: “The treatment of hospitality businesses by some energy suppliers has been nothing short of disgraceful throughout this crisis. These proposals are much-needed and will provide some essential protection for businesses.

“Bringing all businesses under the umbrella of the Standards of Conduct will ensure a level playing field in the business energy market and, crucially, mean action can be taken when certain standards are not met.

I would urge Ofgem to go further in their plans to expand the energy ombudsman and allow all businesses to have the ability to take complaints to it.

“Improving the transparency of broker fees is very positive and will put a stop to instances where businesses had been misled or unfairly treated by some brokers, which had become increasingly prevalent.

“These are all measures that UKHospitality advocated for and I’m pleased that Ofgem has listened to the concerns of hospitality businesses.