Businesses will get fairer treatment, more support resolving disputes and greater transparency on broker fees under new rules announced by Ofgem today.
The changes will apply to the non-domestic energy sector, which includes businesses, public services like sports centres and village halls, utilities, charities and more. The new rules will make sure energy suppliers improve customer service, open doors to alternative dispute resolution schemes and clearly set out costs for businesses, including fees paid for third party services, like energy brokers.
Under the changes, Ofgem will from 1 July 2024:
Further changes, that Ofgem expects to be in place by the end of the year, include:
From December 2024, in line with the government’s proposed new Small Business consumer definition entering legislation, Ofgem will also:
Tim Jarvis, Ofgem’s Director General for Markets, said:
"Too many businesses have experienced issues with some energy suppliers, from difficulty getting the right contracts, unexplained price hikes, and poor customer service.
“We’ve worked hard to understand the breadth of issues and where the powers we have to tackle them can be improved. These new rules will help ensure businesses get the service they deserve.
“We’ll be speaking to businesses of all sizes as these rules come into force throughout this year to make sure they are being followed by suppliers. We’ll also continue to work with government, industry, and consumer groups to see what else can be done to support non-domestic consumers.”
Ofgem’s new rules come as the government confirms plans to expand its definition of Small Businesses, meaning businesses with less than 50 employees and a certain turnover or using a certain amount of energy can take complaints about their energy supplier to the Energy Ombudsman.
Under new Ofgem rules, Small Businesses will also be able to resolve disputes about third parties like energy brokers with redress scheme providers, such as the Energy Ombudsman and the Utilities Intermediaries Association (UIA). This was previously only available for Micro Business consumers so the change will give more businesses access to independent support with complaints.
The changes being brought in by Ofgem to help businesses result from concerns shared last year about problems including poor customer service and complaint handling from those in the non-domestic energy market. This prompted a joint deep dive to learn more about these issues with the Department for Energy Security and Net Zero (DESNZ), the full results of which have now been published.
More than half of those taking part in the research (58%) said they were concerned about the impact of energy prices on their business, with 42% reporting they were very concerned. And almost two thirds (60%) of businesses were satisfied with the overall service they had received from their supplier, with 13% saying that they were dissatisfied.
The main reasons consumers said they were dissatisfied included the service being too expensive, poor customer service, and poor communication from their supplier.