Energy regulator Ofgem has proposed a series of reforms to improve standards of customer service for businesses.
The regulator has published a review of the non-domestic energy market, following a consultation with stakeholders launched in February this year. The consultation found that the small business (SME) sector did not always get the right level of customer service from energy suppliers, and were not as well protected from possible market abuses as the smaller micro-business sector.
As a result, Ofgem is proposing changes to the regulatory framework to require suppliers to give more timely responses to complaints, stepped-up reporting to Ofgem on complaint handling, and giving all businesses access to the energy ombudsman, who is currently only available to households and micro businesses.
The regulator is also calling on the industry to improve transparency in bills to better explain increases in standing charges and payments to third party intermediaries (TPIs) such as energy brokers, and to create better guidance over ‘deemed contract rates’ between customers who have not yet agreed contractual terms with a supplier to avoid issues such as overcharging. Ofgem is also asking the government to consider regulation of the TPI market, which is currently outside of the scope of the regulator’s powers.
Ofgem director Neil Lawrence said: “Suppliers are short-changing too many of their customers, who deserve better.
“Customers need more support when they are struggling and should be able to contact their supplier without frustration or undue delay when they need help.
“While we have seen good practice from some suppliers, we expect every company to raise the bar to provide a consistent service that customers can rely on – and this mission should be driven from the top.”
The British Independent Retailers’ Association (BIRA) welcomed Ofgem’s announcement, emphasising the importance of transparency in billing amid recent significant increases in energy costs.
BIRA chief executive Andrew Goodacre said: “This report highlights that Ofgem recognise ongoing issues with energy supply to smaller businesses, and we support their recommendations.
“BIRA wants to see transparency and lower costs for high street businesses, especially with the cost of energy set to stay at high levels in the foreseeable future.”
BIRA recently joined forces with other trade associations to send an open letter to Ofgem, urging the regulator, to take immediate action on hidden charges imposed by energy brokers.
The open letter, which raises concerns over excessive commission fees levied by unscrupulous brokers, was organised by not-for-profit energy consultancy Box Power CIC and includes signatures from groups such as UKHospitality, Care England, the British Retail Consortium, the Federation of Independent Retailers, the Association of Convenience Stores, the Independent Care Group, and the National Council for Voluntary Organisations.
Ofgem is inviting stakeholders to respond to its findings to help refine the proposals. Changes arising from the non-domestic review will be published in a statutory consultation in autumn 2023, with any licence changes expected to be implemented in winter 2023-24.
To respond, visit: https://www.ofgem.gov.uk/publications/non-domestic-market-review-findings-and-policy-consultation
