ACS

Research by ACS (the Association of Convenience Stores) has revealed that one in five businesses receive inadequate notice that their energy contract is coming to an end. One in ten businesses have received back dated bills and one in four businesses have been initially offered unfavourable renewal terms on their energy contract.

The research, conducted by an independent market research company, comes just a week after Ofgem watered down its recommendation to outlaw rolling contracts for the smallest businesses.

ACS Chief Executive James Lowman said: “This research suggests that thousands of small retail businesses are suffering at the hands of these tactics. We need Ofgem to revert to its original decision to stop rolling contracts.”

Ofgem has recommended a range of new measures to improve small businesses’ experiences with energy companies, including requiring them to give thirty working days notice so that businesses can renegotiate contracts, and giving information in clear and plain English. But their recommendation to end to rolling contracts was replaced last week with an announcement that they will allow contracts to roll over for up to one year.

James Lowman continued: “ACS is pleased to see Ofgem moving in the right direction, but they must go further. As well as an end to rolling contracts, we want to see Ofgem change their definition of qualifying businesses to include all small business, not just micro business.”

Separate to their announcement last week, Ofgem has called on energy companies to improve their handling of customer complaints.

Mr Lowman continued, “Ofgem needs to stop tactics like threatening phone calls and the premature use of bailiffs, and to change to the all-too-common practices of poor co-operation and a lack of record keeping. Ofgem need to get serious about stopping this behaviour from energy companies.”

Contacts:

Shane Brennan Public Affairs Director
01252 515001/ 07921 372 978

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. the research was conducted by him! a research-based retail consultancy, working with over 100 blue-chip organisations in retail, wholesale, on-trade and foodservice. More information on him! can be found here: http://www.him.uk.com/about-him!

3. Key results of the survey of 160 independent retailers are:

Has your energy company sent you a backdated bill in the last twelve months?

Yes 10%
No 86%
Don’t Know 4%

Has your energy company sent you a new contract with unfavourable terms in the last twelve months?

Yes 24%
No 70%
Don’t Know 6%

Has your energy company given inadequate notice that your contract was due for re-newal in the last twelve months?

Yes 20%
No 76%
Don’t Know 4%

4. ACS’ responses to Ofgem’s probe can be found at www.acs.org.uk. ACS has produced a pro forma letter for retailers concerned about energy issues and the Ofgem probe which can also be downloaded at www.acs.org.uk

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 press release on handling customer complaints can be found here: http://www.ofgem.gov.uk/Media/PressRel/Documents1/Complaints.pdf