Retailers get new energy powers over suppliers

Microbusinesses now have the opportunity to achieve major savings on their energy bills through new measures enacted by the CMA.

Microbusinesses now have the opportunity to achieve major savings on their energy bills through new measures enacted by the Competition and Markets Authority.

Suppliers can no longer lock retailers into contracts once they rollover their initial contract and they will also have to list all their microbusiness tariffs online. It is also easier for microbusinesses to switch suppliers, needing only their post code and rate of consumption to shop around for personalised quotes.

If a retailer has been on the default tariff for over three years, rival providers will be given the retailer’s details in order to contact them with offers.

The new rules for energy companies were developed following a two year investigation into the energy market by the CMA. The investigation concluded that 45% of microbusinesses in Great Britain were stuck on expensive ‘default’ tariffs.

Similar to consumer energy tariffs, microbusinesses are automatically transferred onto default tariffs after their contract finishes.

The CMA estimates that the new requirements can save microbusinesses up to £180m per year.

To be classed as a micro-business, a retailer’s company has to meet just one of these three requirements:

  • Employs fewer than 10 employees (or their full time equivalent) and has an annual turnover or balance sheet no greater than €2 million (around £33,829 per week)
  • Consumes no more than 100,000 kWh of electricity per year
  • Consumes no more than 293,000 kWh of gas per year.

Chairman of the CMA’s energy market investigation Roger Witcomb described the findings stating: “Small businesses rely on keeping overheads down to survive, so to find that nearly half of the microbusinesses across the country were on pricey default deals was worrying.

That’s why the CMA ordered energy suppliers to stop automatically rolling small business customers onto fixed-term tariffs.”

ACS chief executive James Lowman welcomed the new rules and added: “We have campaigned for several years for a fairer energy market for our sector, and will continue to work to ensure that convenience stores are given the same protections as domestic consumers when dealing with energy companies.”

Responding to the Queen’s Speech earlier this month, the ACS also outlined additional demands for retailers including a mandatory 12 month limit on bill backdating, additional energy broker regulation and equal rights and protection as domestic energy customers.

Retailers have previously told Retail Express that moving over to a smart meter system in store offers the most significant savings.

Do it: See the CMA’s explanation of the new rules and rights here


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