October 26, 2012 - Rachel Miller

Calls for Ofgem to reform business energy deals

Energy suppliers should be forced to offer businesses the cheapest business gas and electricity tariffs, says the price comparison service Energy Advice Line.

Ofgem has recently unveiled proposals to force suppliers to inform customers about the cheapest tariffs and to ban complex, multi-tier tariffs that make it difficult to understand bills and compare prices. But the proposed changes only apply to domestic consumers.

Now Energy Advice Line has called on Ofgem to extend its reforms to small and medium-sized firms as well as householders. Managing director, Julian Morgan, said: "It's way overdue for Ofgem to step in and extend the kind of protection they are offering to householders, to businesses."

According to Energy Advice Line, many businesses are paying more than they need to as business energy prices and bills are so complex.

"We have long been calling on Ofgem to force suppliers to offer businesses their best prices when fixed-term contracts come up for renewal, because under current arrangements they often do the exact opposite," said Morgan.

"It is common practice for suppliers to automatically roll over unwitting businesses onto very expensive out-of-contract tariffs when their fixed-term contracts expire, and these tariffs can be 50% more, or even higher, than their cheapest deal. Suppliers have refused to stop this unfair practice and many, many businesses have been forced to pay exorbitant tariffs as a result."

For domestic users, Ofgem is proposing to limit each energy supplier to no more than four core tariffs for each fuel when billing householders. Dual fuel discounts will be presented separately to increase clarity.

The Energy Advice Line has produced The Business Energy Best Practice and Advice Guide to help businesses find the best deals.