Businesses in the UK are set to benefit from significant changes in the non-domestic energy sector, thanks to new rules announced by Ofgem. These changes aim to ensure fairer treatment, better support in resolving disputes, and greater transparency on broker fees. This blog will explore these changes, their impact on businesses, and what they mean for business owners and decision-makers.
Contact us today to learn more about how we can help you comply with the new Ofgem rules.
Understanding the New Ofgem Rules
Ofgem’s new regulations, effective from 1 July 2024, are designed to extend the Standards of Conduct to all non-domestic customers, not just Micro Business consumers. This expansion will enable Ofgem to take action against energy suppliers that do not treat their non-domestic customers fairly.
Key Changes and Their Implementation:
Expansion of Standards of Conduct:
Applicable to all non-domestic customers, regardless of size.
Enables Ofgem to hold suppliers accountable for unfair treatment.
Support for Micro and Small Businesses:
New supply licence rule requiring suppliers to direct Micro Business consumers to Citizens Advice for support and advice.
From December 2024, this requirement will also apply to Small Business consumers, subject to legislative changes.
Transparency on Broker Fees:
Starting 1 October 2024, all non-domestic contracts must clearly display any broker fees.
Information on broker fees must be made available upon request.
Improved Complaint Handling:
Updated Complaints Handling Standards to ensure suppliers have suitable processes for Small Business consumers.
Mandatory signposting to the Energy Ombudsman for unresolved issues.
Regulation of Third-party Intermediaries (TPIs):
From December 2024, suppliers must only work with TPIs that are members of a redress scheme when securing Small Business contracts.
Impact on Businesses
These changes are set to provide several benefits for businesses, including:
Enhanced Customer Service:
Businesses can expect better customer service from energy suppliers, with Ofgem having the authority to take action against unfair practices.
Greater Transparency:
Clearer information on broker fees will help businesses understand the costs associated with their energy contracts, leading to more informed decision-making.
Improved Dispute Resolution:
Access to alternative dispute resolution schemes and the Energy Ombudsman will provide businesses with additional support in resolving issues with energy suppliers and brokers.
Better Support for Small Businesses:
Small businesses will benefit from improved complaint handling standards and the assurance that TPIs are members of a redress scheme, ensuring fair outcomes.
Secure the best energy deals with transparent broker fees. Contact us for a free quote.
The Importance of Transparent Broker Fees
One of the significant issues in the energy sector has been hidden broker commissions. Brokers can sometimes add up to 3p/kWh as an uplift on top of the unit rate, which for a large client using over 1,000,000 kWh a year could result in £30,000 paid annually to the broker without the client's knowledge. This lack of transparency has been a major concern for many businesses.
At The Smart Energy Company, we believe in complete transparency. All our clients know exactly what we earn before they sign a contract. We ensure that our commission is clear and upfront, helping you make informed decisions without hidden costs. This approach not only builds trust but also ensures that you are getting the best possible deal on your energy contracts.
Why Choose The Smart Energy Company
The Smart Energy Company is committed to providing outstanding business energy contracts, always prioritising our clients. Here’s why you should choose us:
Tailored Business Energy Contracts: We specialise in finding energy contracts that perfectly align with your specific needs.
Simplified Process: We handle the complexities, so you can focus on your business.
Eco-Friendly Options: Explore green energy alternatives that benefit both your business and the planet.
Dedicated Account Management: Receive one account manager for your lifetime with us.
Market Reports: Exclusive access to market insights to help determine when to purchase your next contracts.
Preparing for the Changes
Business owners and decision-makers should take the following steps to prepare for the upcoming changes:
Review Contracts:
Ensure that all energy contracts are reviewed and updated to reflect the new requirements for transparency on broker fees.
Understand Rights:
Familiarise themselves with the support available from Citizens Advice and the Energy Ombudsman.
Choose Compliant Suppliers:
Verify that energy suppliers and brokers are compliant with the new Ofgem regulations, particularly regarding redress scheme membership.
Conclusion
The new Ofgem rules bring significant benefits. Ensure your business is compliant and gets the best energy deals. Contact The Smart Energy Company today for a tailored quote and transparent service.
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