Ofgem's Bold Move to Shield Businesses from Unscrupulous Energy Suppliers
Posted by Emma on 8th Dec 2023
In a decisive move, Ofgem has unveiled a set of proposals to safeguard businesses from unethical practices by energy suppliers. Recognising the need for enhanced customer service and transparency, the energy market regulator is pushing to expand the Standards of Conduct. This expansion will encompass businesses of all sizes, not just small entities with fewer than ten employees, enabling Ofgem to address supplier misconduct effectively.
A significant aspect of these proposals involves compelling energy companies to disclose any concealed fees paid to third-party brokers, a step away from the current practice of embedding such costs in the overall bill. While only the smallest firms currently have visibility into these cost breakdowns, Ofgem's initiative seeks to extend this transparency to all business entities.
Furthermore, the proposals suggest allowing companies with up to 50 employees to escalate their complaints about suppliers to the energy ombudsman. This move is part of a broader effort to level the playing field for businesses in dealing with energy suppliers.
The consultation period for these proposals commenced on December 7 and will conclude on January 31, 2024. Tim Jarvis, Ofgem's Director of Markets, emphasised the importance of fair treatment for businesses in the energy sector: "Businesses are no different from any energy customer and should be able to expect excellent service and fair prices," he remarked. The proposals aim to offer businesses better deals, enhanced protection, and greater clarity, which is particularly vital during challenging economic times.
Ofgem's action comes amid increasing pressures to address the struggles businesses face with soaring energy prices. Instances of questionable conduct by some energy firms have drawn criticism, notably from UKHospitality, which described the behaviour as "disgraceful." Over the summer, more than 1,300 catering businesses joined a £2 billion legal challenge against energy firms accused of inflating customer bills to pay 'secret' commissions to brokers.
The Federation of Small Businesses welcomed Ofgem's consultation, considering it "encouraging news" for the business community.
We welcome your thoughts and comments below on Ofgem's new proposals and their potential impact on your business.