Ofgem has made a statement calling on energy suppliers to ensure non-domestic customers are being supported and not taken advantage of amid the energy crisis.
Released as part of Ofgem’s due diligence in protecting energy consumers, the energy regulator called on suppliers to provide evidence of measures being introduced to protect non-domestic customers. This is something the regulator has come under scrutiny for due to the raise in the energy price cap.
Ofgem called on suppliers to provide a response to several risks in the current market in an open letter regarding consumer protection.
The issues raised include a lack of offers to contract, which when offered have excessive security deposits, excessive risk premia, a lack of support with issues and extended response times, unacceptable practice during debt and disconnection activities, excessive charges for deemed rates, an increase in standing or management charges and the harm these measures are inflicting on domestic consumers.
Ofgem said that there is a lack of offers to contract when a customer rolls off a pre-existing contract in addition to new connections. Because of this, there has been a surge in businesses on deemed contracts which exposes the customers to some of the highest energy costs on the market.
When contracts have been offered, these have been provided with excessive security deposit requirement causing further controversy within the energy market. As a result, it has made it increasingly difficult for firms to agree terms.
Much of the concerns stem from the energy crisis that is currently impacting the UK’s energy market. As businesses struggle to pay bills, Ofgem reiterated suppliers should provide support via additional measures to help pay bills over the winter period.
Businesses were provided a lifeline via the government’s Energy Bill Relief Scheme, which aimed to half the predicted MWh price for electricity and gas for businesses this winter, to £211/MWh and £75/MWh respectively. This and the Energy Price Guarantee for domestic households, had been enshrined into law by the Energy Prices Bill.
Ofgem however “understands” the difficulties suppliers currently have in navigating the energy market with the organisation having stated that energy suppliers “may be managing increased market and bad debt risk”. Despite these risks, Ofgem believes this navigation should not mitigate the positive impact of the Energy Bill Relief Scheme.
Suppliers have been asked to submit a response by 23 November.
