ACS

ACS has reacted angrily to the weakening of Ofgem’s recommendation to prohibit rollover energy contracts. In a letter to SME representatives Ofgem have revealed that they will allow energy companies to participate in contract rolling for up to a year.

ACS Chief Executive James Lowman said: “Rolling contracts which frequently lock small and medium businesses into damaging terms of supply for long periods. Instead of this softening of proposals we call for more robust action, including extending the remit of this proposal to all SME businesses, not just micro businesses.

“Energy companies argue that stopping rolling contracts will lead to ‘out of contract’ customers receiving bad terms of supply; but in this malfunctioning market place customers are already facing price hikes and poor terms.

“We want businesses to be given more flexibility and encouragement to switch energy companies if they find themselves in this situation. If energy companies have competitive deals and good practice then there will be no problem.

“If Ofgem cannot take decisive action then this important matter should be referred to the Competition Commission.”

ACS fed into the recent consultation that Ofgem ran on its recommendations and will be responding to this latest consultation which is open for 12 days.

Contacts:

Shane Brennan Public Affairs Director
01252 515001/ 07921 372 978

Nina Collins Communications Coordinator
01252 515001

Michael Saxton/ Grappa PR
Julie Kirby 020 7602 9222

Notes to Editors:

1. ACS (Association of Convenience Stores) is the voice of local shops, representing over 33,000 convenience stores. ACS helps local shops thrive through lobbying, support and networking opportunities.

2. ACS is calling on retailers to make their voice heard on this issue. A pro forma letter for retailers to send to Ofgem can be found here. 

3. ACS is calling for:

• Rolling contracts to be ended for all SMEs.
• A dedicated body to assist businesses in legal battles.
• Where an amount is under dispute, for a period of time there should be no outsourcing to bailiffs, threatening letters or phone calls to retailers and interest should not be added for that period.
• Energy companies should not be able to backdate payments where the energy company is a fault.
• Energy companies need to keep a record of businesses actually receiving letters sent to them containing the information set out in the informational remedies.
• When an amount is in dispute retailers need to have one main contact at the energy company rather than speaking to a different contact on every phone call.

4. ACS’ response to Ofgem’s most recent consultation can be found here.

5. A micro business is defined in Article 2(1) of The Gas and Electricity Regulated Providers (Redress Scheme) Order 2008 as including businesses that employ fewer than ten people and which have an annual turnover of less than 2 million euros; or which use less than 200,000 kWh of gas per year or 55,000 kWh of electricity per year.

6. Ofgem’s letter to SMEs can be found: http://www.ofgem.gov.uk/MARKETS/RETMKTS/ENSUPPRO/Documents1/Amendment%20to%20Energy%20Supply%20Probe%20proposals%20relating%20to%20automatic%20contract%20rollovers%20for%20micro%20business%20consumers.pdf