Ofgem Proposes Customer Service Standard Reforms

Britain’s Energy Regulator Ofgem has today (Wednesday 26 July) proposed a series of reforms to further improve standards of customer service for both businesses and households – is this going to help you?

Following extensive engagement with energy suppliers, businesses, consumers and other organisations, Ofgem is today announcing the publication of a Non-Domestic Market Review findings and consultation: non-domestic refers to anything that is not a household. Many businesses throughout the country are struggling with energy market issues. The review summarises the challenges they face, and proposes a number of actions for the sector, Ofgem and Government to address.

Ofgem’s proposals would establish expectations to ensure all consumers receive a consistent and acceptable level of service regardless of the company they are with.

The regulator is taking these steps to drive up standards before this winter to make sure customers and to strengthen protections for business energy customers.

For businesses, some of the immediate changes Ofgem has taken to help include working with industry to adapt the Retail Energy Code to avoid excessive delays and unreasonable requests for documentation during tenancy changes and urging suppliers to be more flexible with businesses who signed up for peak fixed rate prices. This means that Ofgem are working to create a fairer deal for businesses and better conduct from energy suppliers.

There are issues flagged in the review that require regulatory change, so Ofgem is announcing it will consult on the following regulatory changes:

• Introducing better complaint handling between suppliers and businesses – the review heard businesses did not always get the right level of customer service
• Extending micro business protections to all businesses so energy bills spell out what is being paid to energy brokers plus allowing businesses to resolve disputes through a redress scheme
• Creating better guidance over ‘deemed contract rates’ between customers who have not yet agreed contractual terms with a supplier to avoid problems like overcharging

Ofgem chief executive Jonathan Brearley recently visited Manchester, where he met with several businesses and learnt first-hand about issues troubling the business community because of energy costs and severe stress caused by volatile prices.

Mr Brearley also met with Sacha Lord, the Manchester Nighttime Economy Advisor, who has welcomed Ofgem’s market review.

Mr Lord said: “These proposals would be a major step forward in ensuring customers are given fair and proper protections against energy companies who have not been as transparent as they could have been.

“Every week we are being contacted by restaurants, pubs and bar owners up and down the country – the backbone of our hospitality sector – who simply cannot see a viable way forward.

“Ofgem has led the way on efforts to hold energy companies to account. Reforms that properly protect the rights of consumers could not be more vital and I welcome them wholeheartedly.”

In Ofgem’s consultation document, part of the executive summary states:

‘The last two years have seen unprecedented volatility in wholesale gas and electricity prices, and wider economic pressures that create enormous challenges for households, businesses, and suppliers. Ofgem’s mandate is to protect the interests of all consumers, importantly including the businesses, industries, and public services who, now more than ever, need a good service from their energy suppliers.

We have received numerous reports that the non-domestic market is not delivering to our expectations: with accounts of customers struggling to contract with energy suppliers, poor customer service, and larger price hikes than seem necessary. We are determined to investigate poor behaviour in the non-domestic sector and hold suppliers to account.

To help us take the right actions, we needed to identify if issues are temporary, or supplier specific, or whether they show more systemic market issues that may need a deeper market investigation or changes to our rules. We have issued intensive supplier information requests, a Call for Input and undertaken extensive stakeholder engagement to gather information and inform our views.’

It goes on to explain the actions they are taking and the proposed regulatory changes, these include contract rates, security deposits, fixed price contracts, standards of conduct and transparency.

To read the Non-Domestic Market Review findings and consultation document click here.

To share your experiences and challenges with your energy supplier(s) please contact [email protected] so that we can share this with national and local government.