ACS has welcomed Ofgem’s proposals to introduce a new 12-month backbilling limit for microbusinesses in response to their consultation on protecting non-domestic consumers who receive backbills.
The consultation follows ACS’ calls earlier this year for the regulator to take a more active role in protecting microbusinesses from lengthy backbills.
ACS chief executive James Lowman said: “We welcome the steps that Ofgem have taken to ensure that suppliers have appropriate backbilling policies in place. Small businesses should have the same protections as household consumers when dealing with energy companies, and shouldn’t have to decide on energy providers on the basis of the minimum standards that they adhere to when it comes to backbilling.”
Unexpected backbills can be a threat to businesses, as the current limit means that retailers could receive a bill worth thousands of pounds at no fault of their own. Energy costs remain a significant burden to convenience stores despite retailers taking steps to invest in their businesses to be more energy efficient. Currently, it is voluntary for suppliers to limit their backbills to one year for microbusinesses. Non-domestic backbilling limits currently range from anything up to five years, depending on the supplier and fuel type.
In April 2017, Ofgem set out their plan in a consultation to protect domestic consumers from backbills by introducing a statutory 12-month backbilling limit which suppliers would have to adhere to. ACS responded to the consultation urging that microbusinesses be included with in the scope.
Referencing ACS’ calls for action on a tougher regulatory framework for backbilling in the consultation, Ofgem said: “The Association of Convenience Stores (ACS) highlighted the importance of stable energy costs for the viability of convenience store businesses and points to the fact that many small business consumers have no greater resource or understanding of energy markets than domestic consumers”
Ofgem’s proposals are available in full here: (https://www.ofgem.gov.uk/publications-and-updates/protecting-consumers-who-receive-backbills-statutory-consultation)
