The Competition and Markets Authority final report was issued on 24th June. This was a comprehensive report covering many areas of the Energy industry, but it did have some good outcomes for consumers. These will need to be put in place by OFGEM, but we expect these reforms to happen within the next six months. The most relevant to Bid levy payers are:-
Micro businesses will no longer be tied in to Rollover contracts with immediate effect. Most of the large suppliers had already removed Rollover contracts from their terms and conditions, but the smaller companies had not. In future if you forgot to terminate a contract you will be able to give 30 days’ notice to switch suppliers.
If a smaller micro business has not been active in placing a contract in three years the company will be placed on a database held by OFGEM, which licensed suppliers will have access to. Suppliers will then be able to directly contact these customers to encourage switching. The database will be address only – no telephone numbers or e-mail addresses. It will not be open to energy brokers. This is expected to go live in 2019.
Note the expected (and much needed) regulation of energy brokers was not implemented in the final report, however OFGEM have publicly stated that they will now implement this themselves when they can get agreement for who will fund and administer it.
Following high customer complaints via the Ombudsman and Citizens Advice Extra Energy is under investigation by OFGEM to see if they have breached their supplier licence.
So what should I be paying on a new contract now?
Since our April bulletin there have been two major changes impacting energy prices. Oil prices have risen with the global stocks falling (and gas prices are linked to oil). Also the Pound Sterling has lost value to the Euro and the Dollar, and with the UK being a net importer of energy this has increased prices. Both these factors only impact the energy portion of your bills, which is less than half of the cost.
The price you will pay will vary on when you last placed a contract, and also whether you use a lot of energy or are a small consumer. Business energy is generally available at a lower cost than domestic energy.
As of 6th July 2016 in Canterbury if you are offered a single rate electricity meter a unit rate below 10.5p per kWh is a guide that you are being offered a good rate, and your daily standing charge on this should be below 26p per day. If you are being quoted more than this you should consult a reputable broker (such as ZTP!).
Gas is more variable on volume but a typical small usage gas rate available in Canterbury at the moment would be around 3.0p per kWh with a standing charge below 25p per day. With gas as the usage goes up so does the standing charge – so beware of looking at unit rate only.
ZTP are happy to look at the energy bills of any BID business and comment on whether the rates can be bettered. There is no commitment to using us, but we hope you will find our service and results such that you will. Contact Martyn Young if you would like to know more.