No Fair Energy Deal for Business

No fair deals on energy for small business

No fair deals on energy for small businessIn November last year Energywatch, the energy watchdog, reported that the UK’s Small Businesses were getting a raw deal on energy. Now the British Chambers of Commerce (BCC) are picking up the baton saying that energy suppliers are failing to provide businesses with the same fair and transparent service that domestic energy users are entitled to.

With energy bills soaring and the economy in a sharp decline, the BCC is urging OFGEM, the energy regulator, to ensure that their current probe into the energy industry addresses a number of serious flaws in the way energy companies deal with businesses.

Furthermore, with the consumer champion Energywatch set to be amalgamated along with several other consumer groups from October 1, the BCC is calling for a new, independent and dedicated watchdog to be established, which is specifically focussed on the energy concerns and needs of business. Energywatch analysis shows that they receive 32,000 calls from businesses seeking help and advice every year. A new and dedicated business watchdog would ensure that this vital service is not lost in the creation of a single consumer group covering a range of industries.*

When compared to domestic energy users, businesses are significantly more vulnerable to exploitation and unfair practice by energy firms. Some of the key differences include:

  • On the provision of pricing, whilst domestic suppliers are required to publish their tariffs for ease of comparison; for business suppliers, there is no regulatory requirement to do so.
  • The basic domestic contract allows people to switch every 28 days; for businesses long term contract commitments are demanded for up to 5 years, which can be rolled over with little pre-warning.
  • Domestic energy users are entitled to a "cooling off" period on verbal contracts; for businesses, verbal contracts are immediately binding.
  • There is a one year restriction for back billing on domestic users; however, there is generally no such restriction for businesses.

Commenting on the lack of adequate protection for businesses using energy suppliers, Director General of the British Chambers of Commerce, David Frost, said:

"With the economy slowing and energy bills on the rise, it is totally unacceptable that hard pressed businesses are left so open to exploitation by energy suppliers. OFGEM’s investigation into the industry must hold the suppliers to account over the very apparent lack of transparency and fairness in their dealings with business.

"Energywatch is currently providing a crucial service to thousands of businesses who are confused and frustrated by energy suppliers. If a ‘super consumer group’ is to be established, as the Government plans, there is little doubt in my mind that this service will be all but lost, leaving companies at the mercy of the suppliers. An obvious solution would be establishing a separate watchdog, dedicated to assisting businesses."

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