New protections for small businesses
Following research by the energy industry regulator Ofgem that showed business customers were receiving a bad deal from the energy market, new measures have been introduced to give extra protection for small business energy consumers.
Do these protections apply to my business?
These protections only apply to micro-businesses, that is the smallest businesses. For these purposes a micro business is defined as a business that:
- has less than 10 employees and a turnover of less than €2 million a year
- uses less than 200,000 kWh of gas
- uses less than 55,000 kWh of electricity per year
These rules will also only apply to micro-businesses who sign a new energy contract after 18 January 2010. That means if you are in an existing contract these rules will only apply to your business once you have extended or signed a new contract that date.
What are the new protections?
Before you sign a new contract
- Before you enter an energy contract your supplier must explain the key terms and conditions to you, this applies to contracts agreed on the phone or in person
- Within 10 days of you signing a contract you should receive written copies of the contract with full terms and conditions including renewal terms
- If your contract is fixed for a period of time (for example 12 months) you can notify your supplier at any time during your contract that you do not wish no renew the contract once it expires, you will still have to see out your contract but your contract will not be automatically renewed once it expires
When your contract ends
- 60 – 120 days before the end of your contract your supplier must send you a letter outlining the key contract renewal terms, this will include information on the new prices you may pay – including what will happen if you take no action and what will happen if you do not want to renew your contract
- Once you have received your statement of renewal terms you have 30 days in which to contact your supplier and tell them you would like to negotiate a new contract or change to another energy supplier
- Once you have notified your supplier you would like to negotiate a new deal your supplier will then offer you new contracts, one of these contract must be valid for the duration of the 30 day period
- If you do not tell your supplier you want to renegotiate your contract or change supplier within this 30 day period your exisiting contract terms can only be rolled over for a further 12 months
For more information, see our leaflet Switching energy supplier – advice for small businesses or Ofgem’s advice document on the new arrangements.