We frequently see suppliers hauled over the coals in the media, albeit usually the domestic market. However, what’s causing much consternation is the fact that despite some legislative changes at the smaller end of the SME ‘Micro Business’ market, the business energy market seems in thrall still to the new energy oligopoly. (see www.torse.co.uk/pirates-energy-companies/ ). It shouldn’t be too much of a surprise, an industry with fundamental barriers to entry, big players, weak governance and little legislation has enabled the Energy companies to take a fairly cynical stance towards their markets.
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The Government has passed legislation requiring all suppliers to replace both Electricity and Gas meters with automatic meters for all (but the smallest) businesses by 6th April 2010. It might sound a long way away, but they will have to change 200,000 meters.

Guess who pays? The government has allowed suppliers to pass on all the costs to businesses. This will be either through your supply contract (much the same as it is for most businesses at the moment) or a separate AMR Metering contract. This will inevitably cause some confusion when Renewing or changing your Gas and Electricity supply contracts; the business or whoever looks after your Energy Supply arrangements will generally be able to assist in this area. This information really belongs to the business and so you can sort out all your own metering arrangements and not just keep paying the supplier.

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In an effort to assist and, where possible, protect small businesses and vunerable consumers paying increasing energy costs, Ofgem have imposed a set of guidelines for energy suppliers. The Ofgem press release is attached below but a brief summary of these changes are as follows:

1. New requirements on written estimates following visits from face-to-face salespeople will come into force on 18 January 2010. Essentially, this would put an end to Contracts being signed that don’t match what was ‘promised’.

2. Doubling the threshold of debt a customer can carry and still switch supplier to £200 will come into force on 18 January 2010. This reduces the practical obstacle that has delayed many clients in the transfer process.

3. Further clarity in printed billing information [via PDF or post] from suppliers and the production of annual statements to customers if these are not already in existance from July 2010. This provides improved billing management.

4. Requirement for the six big energy companies to show more openess regarding their margins from the business community in these difficult financial times. This should enable businesses to see to what extent they are being exploited within the market.

Ofgem Assistance for SME and Consumers Press Release PDF

Smart Metering is in the news today and the BBC have produced an overview of how a smart meter works in addition to their discussion on how much you can save with a smart meter. Whilst these refer to the domestic market, there is significant relevance for the business market also.

It’s a familiar story; if you can’t measure it or see it, it can be hard to do anything about it. It seems unlikely that energy prices will reduce over time, and this combined with the focus on Carbon Reduction Commitment for all, should make this a very real issue for most businesses.

Empirical research suggests that simply monitoring consumption, improves awareness and typically consumption will fall. Thus at the most basic level smart metering will help. What Smart metering will do above and beyond the basics for business is provide, up to date accurate information about their consumption.
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