ACS has welcomed energy regulator Ofgem’s announcement of a mandatory 12-month limit on backbilling for microbusinesses.
Ofgem’s announcement states: ‘Many suppliers have signed up to, or follow, a voluntary agreement not to backbill customers past 12 months. However, the voluntary agreement does not cover all suppliers, and those that have signed up do not always follow this agreement. Ofgem, which consulted on this issue last year, has decided to ban all domestic and microbusiness suppliers from issuing backbills for energy used more than 12 months ago.’
ACS has been campaigning for several years to reduce the backbilling limit for small businesses to one year, in line with that of domestic consumers, and has worked with Ofgem, the All Party Parliamentary Small Shops Group and 10 Downing Street to stop excessive backbills being issued to the smallest businesses.
ACS chief executive James Lowman said: “Ofgem’s announcement will be a welcome relief to many retailers who have been the victim of huge backdated bills totalling thousands of pounds, often at no fault of their own. The 12 month limit on backbilling is long overdue, and is an issue that ACS has been campaigning on for many years. We believe that the vast majority of independent retailers operating in the convenience sector have no more expertise or resources to deal with energy companies than domestic consumers, and as such should be provided the same protections. This announcement is a step closer to that goal.”
A business consumer is defined as a microbusiness if they meet one of the following criteria:
- employs fewer than 10 employees (or their full time equivalent) and has an annual turnover or balance sheet no greater than €2 million; or
- uses no more than 100,000 kWh of electricity per year; or
- uses no more than 293,000 kWh of gas per year
The new backbilling rules will come into force for microbusinesses in November 2018.
The full announcement from Ofgem is available here: https://www.ofgem.gov.uk/publications-and-updates/ofgem-bans-suppliers-backbilling-customers-beyond-12-months
