We issued a blog earlier in the week about the need for the government to extend its assistance on better information in the domestic market to small businesses. Clearly someone is listening as on the BBC News today Ofgem have announced that small businesses will receive clearer information from suppliers under new energy regulations.
So what does this mean for small businesses, those with fewer than 10 employees (micro businesses) currently are protected to some degree under the current regulations. Under the proposed changes the regulator wants to expand this to firms which spend up to £10,000 a year on gas and the same on electricity.
Ofgem’s plans for small businesses should make details of fixed-term deals clearer. Better information should be provided to small businesses as to when there contracts will end. This will therefore give them sufficient notice to ensure the next contract is in place and at a competitive price.
It hopefully will also put an end to dreaded multi year roll over contracts, as can currently happen.
The proposals are estimated by the regulator to improve protection for more than 150,000 firms.
The new regulations are set to include:
- Suppliers sending details of a new fixed-term offer at least 60 days before the end of a contract
- A 30-day window for a small business to sign up to a deal if it wants, or inform of plans to switch supplier
- A firm that fails to respond may only be put on a new rollover contract that lasts for a maximum of a year