A crackdown on the abuses carried out by energy companies is finally on the cards – and it could help struggling independents chop a third off their energy bills. Newly proposed rules from gas and electricity regulator 
Ofgem state that energy suppliers must clearly show the date the contract ends on small businesses’ energy bills, so fewer get caught out by the ‘rollover trap’ and end up paying far more than they need to.

The measures are now subject to consultation and are set to be made legal next year. This could end up saving retailers as much as a third on their energy bills by giving them the information they need to choose cheaper contracts, according to price comparison service Make It Cheaper, counteracting the hike in costs set to result from Government energy policies announced last month. Ofgem has also proposed that legal protection is extended to business customers that spend up to £10,000 a year on each fuel – meaning an extra 150,000 businesses will be covered.

“Knowing when your contract comes to an end – and therefore avoiding pricey rollover rates – basically means the difference 
between paying 15p and 10p 
a unit for electricity,” said Jonathan Elliott, managing director of Make It Cheaper.  In the September 11 issue of Retail Express, indies expressed outrage at expected hikes in energy costs. Middlesbrough retailer Bay Bashir’s costs were set to rise from £6,000 to £8,000, and Essex retailer Nimit Patel expected his to go from £10,000 to £13,000.

Trade bodies have supported the proposals. The Federation of Small Business said it “welcomed the determination from Ofgem to give small firms a fairer deal”. James Lowman, chief executive of the Association of Convenience Stores agreed, adding there should also be a strict one-year limit to back billing.

How to respond to the Ofgem consultation:

• Log on to ofgem.gov.uk
• Search for The Retail Market Review – updated proposals for business
• Read through the proposals in the document
• On page 57, read through the relevant questions and write your responses
• Email your responses to rmr@ofgem.gov.uk

This article is taken from the November 6 – 12 issue of Retail Express