Energy watchdog in businesses vow

Updated: 
Light bulbEnergy watchdog Ofgem has vowed to crack down on suppliers who frustrate businesses from switching to another provider.

The regulator is also concerned that some firms are being rolled over on to new contracts lasting up to three years, often without their knowledge.

As part of its reform of the energy market, Ofgem has set out new standards of conduct, with financial penalties to improve supplier behaviour.

It is considering enforcement action against some suppliers after research found firms were prevented from switching because of a high number of objections from suppliers, including some that were later withdrawn.

Ofgem said it wanted businesses to get clearer information about when their contracts are ending and what renewal options are open to them.

Chief executive Alistair Buchanan said: "During our investigation into the energy market, businesses told us about a range of problems they were having with energy suppliers and also some energy brokers. As we have demonstrated in the domestic market, we will also take a tough line on any suppliers we find systematically breaching rules designed to protect businesses."

With Ofgem currently having no direct power over brokers, it is planning to ask the Government for new powers to take enforcement action directly against brokers for misleading marketing in the business sector.

The initiative was welcomed by the Association of Convenience Stores (ACS), a trade association with more than 33,500 members.

Its chief executive, James Lowman, said: "Ofgem's plans to extend protections to more businesses are long overdue and will be welcomed by local shops. These cannot come quickly enough." However, he said, small businesses were still at the mercy of energy companies when it comes to backbilling.

Mr Lowman added: "Getting an unexpected bill of several thousand pounds puts local shops and other small businesses that are at the heart of the economic recovery at risk of closure. Ofgem must intervene to stop these abuses of power."
© 2011 Press Association

SPONSORED FINANCIAL CONTENT