Will Ofgem act to protect businesses from high deemed out of contract prices?

Not for profit energy firm Box Power have recently written to Ofgem raising concerns about the onerous out of contract deemed electricity and gas rates charged by energy suppliers.

For example, a business that has just moved into a new premises will automatically be put on deemed contract rates and unless they contact their supplier or check the market for better options straightaway they will start paying the much higher rates as soon as they move in.

It can sometimes be weeks until they make contact or shop around so their bill can be really high before they know it, which is the last thing you need when you are trying to get your business off the ground.

Box Power believe that the deemed rates are unduly onerous and in breach of a key standard licence condition that all energy suppliers need to adhere to.

An Ofgem spokesperson said: “We welcome Box Power’s feedback to our in-depth review into the non-domestic market, along with all other responses to our consultation.

“As well as setting in place a number of positive changes, Ofgem has made several proposals to better protect businesses from sharp practice in the energy market and is already taking action.

“We will be reviewing and considering all responses in advance of making formal changes. This includes updated guidance for deemed contract rates.”

Until we see the new proposals from Ofgem, we would just encourage businesses to make sure they are on the best possible price as the current energy crisis means that electricity and gas is a top 10 balance sheet item. It is not going to drop out of this top 10 status for a while yet so it is up to the business to make sure that they are paying the best possible price.

Compare the market

If you are moving into a new premises, out of contract or approaching the end of a fixed term contract, it is really important that you check the current retail rate of business electricity and business gas.

You can do this completely online. All you need is your business postcode to see the latest business electricity and business gas prices for your meter.

Track the wholesale levels of electricity and gas

Business energy prices change every day based on the movement in the wholesale price of electricity and gas. As a business, it is really important that you track this to make sure you make a confident decision on your next energy contract.

You can track the latest price trends by clicking here.