Ofgem wants fairer treatment for businesses

The gas and and electricity regulator, Ofgem, has sent a letter to all non-domestic energy suppliers to remind them of their obligations to treat business customers fairly.

The move by Ofgem is in response to concerns raised by many trade groups and customers regarding the fairness of “deemed rates” which are variable tariffs charged to customers who have not agreed to a fixed term, fixed price energy contract. Deemed rates would typically apply to a customer moving into a new premises.

In this situation, business owners can be slow to engage with the supplier and often don’t even know who their premises supplier is.

Ofgem has recently concluded a review of the non-domestic energy market and has now published guidance outlining its expectations for suppliers concerning deemed contract pricing and aims to ensure that customers are not overcharged on these “deemed” rates.

In the letter, the Ofgem said: “Given the challenges many businesses are still facing, it is critical no customer this winter pays more than they should. Following our recent investigation into how suppliers are pricing their deemed contract rates, and after consulting on draft guidance, today we are publishing our final Guidance on Deemed Contract rules.

“This means suppliers can review their current processes and satisfy themselves they comply with the licence condition as soon as possible.

“The rules require suppliers to ensure their deemed contract terms are not unduly onerous. We will not hesitate to act where we suspect suppliers are not complying with the rules.”

If you are moving into a new premises, we would encourage all decision makers to quickly compare online. Our comparison engine links to the industry and knows who supplies the meter so presents prices from a wide selection of suppliers that want to supply the meter.

It can take 5-10 days to switch to a new supplier so it is important that you compare and agree a contract as soon as you move in to avoid paying the expensive deemed rates.

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