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Market, Rules and Regulators

The Energy Market

The business energy market can be a confusing place. It is certainly very different to the domestic market and few businesses have time to really get to grips with it all in order to feel absolutely confident they are making the right decision.

Our guides are here to explain it in a clear and informative way and if you need any further information or assistance, our Energy Experts are on the end of the phone (or email!) to help further.

The regulators

The key bodies are:

Ofgem (Office of Gas and Electricity Markets)

ofgem straplineFormed by the merger of the Office of Electricity Regulation (OFFER) and Office of Gas Supply (Ofgas), Ofgem regulates both electricity and gas markets. Ofgem’s main priorities are to protect consumers, promote competition and regulate network companies. Any company planning to supply gas or electricity to customers, run a gas or electricity network or generate electricity must be licensed by Ofgem. These licences, however, come with strict conditions that define the obligations of the supplier to both the consumers and within the industry. As well as licensor, Ofgem is police officer. It monitors companies to make sure they’re not breaking the terms of their licence, nor acting anti-competitively or breaching consumer protection legislation. The Gas and Electricity Acts provide for penalties of up to 10% of a licensee's turnover for failing its license conditions. It also provides for enforcement orders to make supply companies comply with their obligations. Ofgem can also ‘name and shame’ those acting against the interests of consumers – which is considered a strong deterrent in what has become a highly competitive market. Consumer protection is primarily aimed at domestic consumers however they also undertake a mandate to protect businesses. For more information visit: www.ofgem.gov.uk

The Department of Energy and Climate Change (DECC)

decc logoDECC took over responsibility for energy and climate change when it was formed in 2008. Previously, the Department of Business, Enterprise & Regulatory Reform and Defra had overseen these areas. DECC oversees the UK’s energy policy as was set out in the Energy White Paper of May 2007 and Low Carbon Transition Plan of July 2009. DECC has four key priorities:
  1. To save energy via the Green Deal and support vulnerable consumers;
  2. To deliver secure energy on the way to a low carbon energy future;
  3. To drive action on climate change at home and abroad;
  4. To manage the UK’s energy legacy responsibly and cost-effectively.
DECC is effectively the boss of Ofgem. For more information visit https://www.gov.uk/government/organisations/department-of-energy-climate-change

Consumer Futures

consumer futures

Consumer Futures is a statutory consumer champion with the key priority of getting a fair deal for energy consumers. Their focus is solely consumers and micro business. Consumer Futures hold extensive legal powers including the right to investigate consumer complaints of wider interest, the right to open up information from providers, the power to conduct research and the ability to make an official super-complaint about failing services and help shape the business energy market with its policy and research activities. It is funded by the Department for Business, Innovation and Skills (BIS) and from licenses paid by energy suppliers and is also able to raise its own funds through externally funded projects. Consumer Futures provides businesses with advice and information about energy, suppliers and brokers and are able to investigate complaints about business energy suppliers and brokers if they are deemed to be of general interest in terms of regulation.

The Energy Ombudsman

energy ombudsmanIf you have a complaint about your business energy supplier, you should follow its published complaints process. If your complaint is not resolved to your satisfaction within eight weeks – earlier if your supplier explains that they cannot do anything else to help you – and your business fits within the micro business definition, the Energy Ombudsman (now known as the Ombudsman Services: Energy) can investigate. As well as getting the party to apologise, they can take practical action to settle a complaint and, in some cases, force financial recompense. For more information go to: http://www.ombudsman-services.org/energy.html