When you're running a small business you face a whole host of decisions and issues. The choice you make about your energy supply can be one of the most important.
The information contained here is designed to give help, advice and guidance on some of the energy-related pitfalls that small businesses can encounter. Whether it’s what to consider when you’re starting up, mis-selling, bad billing, misleading contracts or negotiating the best payment terms, you’ll find help here and also within our business energy knowledge base.
It’s also a surprising fact that, although small businesses face many of the same issues faced by households, they don’t have the same protection.
Changes to customer representation
The government introduced new arrangements for consumer representation in the energy sector from 1 October 2008. The new arrangements create a package of support and protection for consumers who have an issue or complaint with their energy supplier. This builds on existing arrangements including the Energy Ombudsman and replaces energywatch.
Ofgem has introduced tough new complaints handling rules for energy companies. The complaints handling standards came into force on 1 October 2008 and apply to all complaints from domestic and micro business consumers made to suppliers and energy network businesses. The government defines a micro business as one with:
- an annual consumption of electricity of not more than 55,000kWh; or
- an annual consumption of gas of not more than 200,000kWh; or
- fewer than the equivalent of ten full time employees and an annual turnover or annual balance sheet total not exceeding Euros 2 million.
The new standards address some of the major sources of frustration for consumers identified by Ofgem. For example:
- consumers will no longer have to repeat all the details of the complaint if they need to contact the supplier again;
- suppliers will no longer be able to insist that complaints are put in writing before they can be considered; and
- companies will have to publish information on the number of complaints they receive. This will enable consumers to judge which companies provide the best service.
Companies will be audited on how they handle complaints and will face fines of up to up to 10 per cent of turnover if they are found to have failed to meet the new standards. Ofgem will carry out the first audit at the end of 2008 to ensure companies are meeting the new obligations and to help promote best practice.
Small Businesses
The Consumer Estates and Redress Act brings into force the new arrangements for customer representation and in it there is no distinction between domestic energy customers and small businesses. This means that small businesses will benefit from the new complaint handling standards set by Ofgem, the redress scheme run through the Energy Ombudsman and, as a backup, Consumer Focus' Extra Help Unit will accept cases referred by Consumer Direct for vulnerable small businesses, including businesses that have been disconnected or threatened with disconnection.
Consumer Focus has consulted on a forward work programme. It is engaged in a dialogue with stakeholders, including representatives for small businesses, to set the focus for the new organisation over its first eighteen months. This programme will be published 1 October 2008 when the new organisation has launched.