Following a recent investigation, Ofgem has released a new set of guidelines for implementation this autumn designed to protect small businesses by increasing transparency in contracts and agreements with energy brokers and advisors. This will reduce many of the problems faced by small businesses in negotiating deals and clarity on knowing what rights they have as a business energy consumer therefore reducing the number of complaints and hours spent resolving disputes. These changes include:

• A push by Ofgem to remove the automated rollover of contracts to energy suppliers giving greater flexibility and freedom to businesses
• Ofgem encouraging energy brokers to explain where their funding comes from and which suppliers they use.
• Package of measures to help micro-businesses will enable them to engage more effectively in the market and secure better deals for energy.

Our investigation showed that small businesses are being woefully served by energy suppliers. This has to change. We anticipate that the package of measures we want to introduce will improve business customers’ ability to engage effectively in the market.

Alistair Buchanan, Ofgem Chief Executive

Ofgem guidelines dictate that a supplier should clearly indicate to their customers when their term will expire and also make it clear how they can move to a new supplier should they wish to do so.

Advice from Torse

• Do not agree to everything over the telephone. Please warn your staff of this. We have group clients where junior members [usually!] of staff have been held liable for contracting commitments on behalf of the business.
• Do not sign up at the door – get yourself some written comparison quotes and make sure you see what you are agreeing to.
• Do not sign a binding agreement with a consultancy. There are brokers who will provide their services without a time commitment. If you do sign a binding agreement you could end up paying fees whether you use them or not.
• Do read the terms and conditions. Yes, you really do need to give 3 months notice just to negotiate with your existing supplier.
• Do make sure you or your broker keeps secure copies of rates and contracts agreed. Suppliers often make mistakes.
• Do check out the company by looking at their website, examining how long they have been trading and whether they are a limited company or not. You can see some of these details by going to companies house. Ask to speak to their other clients.
• Do beware of ‘Trade Associations’. How do they actually manage the standards of their members? Look at the small print to guage whether they implement any sort of benchmarking technique or make any demands of their members at all.