Change needed for retailers stuck in expensive tariffs, ACS says

Ofgem must act to stop stores being unfairly stuck in expensive tariffs when changing tenancy, the ACS has demanded

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The urgent action is needed for retailers overpriced ‘deemed’ rates, the trade body has said in its submission to the regulator’s non-domestic market review.

Deemed rates are energy rates charged when a retailer moves into a new premises without negotiating an energy deal with the existing gas or electricity supplier.

At present, retailers can be unnecessarily put onto these expensive deemed rates for an undisclosed amount of time, for example when completing a change of tenancy.

The ACS has demanded a time limit for suppliers to complete a change of tenancy in order to minimise the time spent on deemed tariffs, and also called for a ban on deemed rates altogether, in favour of suppliers retaining the previous tariffs. The trade group also said the government must better regulate business energy brokers.

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The market should be ‘fairer and more transparent’, ACS said. The protections proposed would be more aligned with that of the domestic market.

ACS chief executive James Lowman said that retailers have faced “huge challenges” with energy bills over the last year, and excessive fixed contracts have meant many have had to operate at a loss.

“While prices are now coming down, standards and practices in the non-domestic energy market remain severely lacking, so we welcome Ofgem’s efforts to address these issues and urge them to go further to ensure the market is fair and transparent for all businesses,” he said.

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