Ofgem: Non-Domestic Policy Changes
The energy regulator, Ofgem, has announced the outcome of its consultations on non-domestic policy. The consultations included discussions with businesses, trade associations, consumer groups and energy suppliers. The policy changes hope to protect businesses and provide greater clarity and transparency within the non-domestic sector. Ofgem have announced the following that will come into force from 1st July 2024:
- Expand the Standards of Conduct to apply to all businesses of any size, rather than just micro-consumers, and allow Ofgem to act against suppliers that do not treat non-domestic customers fairly.
- Introduce a new supply license rule for non-domestic suppliers which requires them to signpost micro-consumers to Citizens Advice for support and advice when they have an issue.
- Expanding the requirement for principal terms to clearly display any broker fees from micro-business customers to all non-domestic customers. This will apply to contracts on or from 1st October 2024 and suppliers must make this information available upon request.
From December 2024, Ofgem will also update its non-domestic policy in line with the government’s proposed new Small Business customer definition that is to enter legislation. Ofgem will:
- Update the Complaints Handling Standards to ensure suppliers put in place a suitable complaints process for small business consumers and point them to the Energy Ombudsman when a customer does not feel an issue has been resolved.
- Implement a requirement for suppliers to only work with Third-Party Intermediaries (TPI) that are members of the redress scheme when securing small business contracts, to help achieve fair and suitable outcomes when dealing with brokers.
- Introduce a new supply license rule for non-domestic suppliers which requires them to signpost small business consumers to Citizens Advice.
Ofgem is also in the first stage of developing best practice guidance on non-domestic billing transparency, with the hope of implementing agreed actions.
LGE’s View:
LGE welcomes any policy changes that furthers clarity and transparency in the non-domestic sector and reinforces the need for TPIs to provide full visibility on fees and be compliant with any regulatory schemes. LGE became one of the first TPIs to become an adopter of Ofgem’s proposals for transparency in 2014 and has long advocated more transparency in the TPI sector. All of LGE’s clients have full visibility on utility cost make-up and whilst many TPIs accept additional commissions from suppliers in exchange for exclusive relationships, the commission stated on LGE’s contracts is the only commission a client is charged.