Micro-business energy concernsEnergy Policy into Practice: slides for advisers

What’s the issue?

• Micro-businesses find themselves facing many of the same problems in the energy market as domestic consumers

• BUT they enjoy fewer protections and support• They are also expected to shoulder a

disproportionate amount of the green energy cost burden

• New regulations are being discussed by Ofgem in several areas of concern to us – there will be big changes in 2012

Consumer Focus position view

• In many areas we want protections and regulation upgraded to the domestic level e.g. we have big concerns with back-billing (up to 6 years) and the ease of disconnection if not paid

• Back-billing rules are now being introduced but will take several years to establish. Ofgem is also keen to establish new “best practice” on debt recovery

• Government has traditionally not paid much concern to this area; DECC interest now is in business’ role in smart meters and Green Deal, not the market per se

The consumer experience

• Telephone brokers are unregulated and some use dishonest marketing that gives businesses bad deals. Ofgem however is seeking new powers to accredit them

• Roll-over contracts continue to confuse businesses and result in punitive tariffs

• Tariffs are higher than domestic and are expected to rise even more up to 2020 to pay for climate change policies

• Payment problems become disconnection problems quickly thanks to suppliers’ blunt approach to debt – best practice needs work here

Policy challenges?

• Ofgem will be extending protections to bigger businesses (up to 50 employees)

• There are ongoing consultations and engagement opportunities with government regarding the rollout of smart meters and business participation in the Green Deal

• Debt and disconnection rates need to be monitored regularly

• Broker accreditation needs to ensure suppliers take responsibility for “bad” contracts

Want more information?

• Andy Hallett (andrew.hallett@consumerfocus.org.uk) and Hannah Mummery (hannah.mummery@consumerfocus.org.uk) work on micro-business energy issues at Consumer Focus

• Consumer Focus micro-business information at www.consumerfocus.org.uk/get-advice/energy/business

• Ofgem advice at www.ofgem.gov.uk/Consumers/Pages/Bc.aspxs