Bira supports Ofgem over lower costs for SMEs

The British Independent Retailers Association has expressed its support for today’s report announcement by Ofgem’s for the regulatory changes proposed to address ongoing issues with energy supply to smaller businesses.

As part of its Summer Retail Package, Ofgem has revealed it will be asking the government for more to be done to address the issues in the energy market for business customers.

Andrew Goodacre, CEO of Bira, emphasised the importance of transparency in energy bills, especially amid recent significant increases in energy costs.

“This report highlights that Ofgem recognise ongoing issues with energy supply to smaller businesses. We support their recommendations especially as earlier this week we called for greater transparency around broker fees for all business customers, as they have done for micro businesses. 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,” he said.

Immediate changes taken by Ofgem to assist the non-domestic energy market include working with the industry to adapt the Retail Energy Code, aimed at avoiding excessive delays and unreasonable requests for documentation during tenancy changes. Ofgem is also urging suppliers to be more flexible with businesses who signed up for peak fixed rate prices.

However, certain issues flagged in the review will require regulatory change. To address these, Ofgem will consult on the following:

• Introducing better complaint handling between suppliers and businesses to ensure the right level of customer service is provided.

• Extending micro business protections to all businesses, ensuring energy bills spell out what is being paid to energy brokers and allowing businesses to resolve disputes through a redress scheme.

• Creating better guidance over ‘deemed contract rates’ between customers who have not yet agreed contractual terms with a supplier to avoid problems like overcharging.

As Ofgem’s powers in the non-domestic retail market are more limited than in the domestic sector, the organisation calls on the government to consider further protections in areas where regulatory power is lacking, such as energy brokers. Ofgem also requests that businesses be given access to the energy ombudsman and calls for further consideration for vulnerable domestic consumers on non-domestic contracts, ensuring they do not miss out on essential protections.

The full report will be available online from today (26) and Ofgem invites feedback by 6 September 2023. Ofgem has promised to  work closely with stakeholders and the government to consult on any license changes that may arise as a result of this review.