What is a Micro Business?
Ofgem initiated the concept of a micro business in 2010 because they believed that some businesses in the UK needed additional protection from the energy market over issues like fair contracting, billing and complaints.
The original definition for a micro business was a business customer that:
- Consumed 200,000 kWh or less of gas a year
- Or consumed 55,000 kWh or less of electricity a year,
- Or had fewer than ten employees (or their full-time equivalent)
- And had an annual turnover or annual balance sheet total not exceeding €2m
Under Ofgem’s Retail Market Review (RMR), a major focus was placed on extending this definition to ‘catch’ more businesses that might fall foul of the energy market.
Following the RMR the new definition of a micro business is now:
a business customer who:
- Consumes 293,000kWh or less of gas a year
- Or consumes 100,000 kWh or less of electricity a year,
- Or has fewer than ten employees (or their full-time equivalent)
- And has an annual turnover or annual balance sheet total not exceeding €2m.
Whilst this isn't groundbreaking in its additional reach it is bringing into play a greater number of customers, and even in some instances some (traditionally high user) half hourly meters have been picked up under this expansion.
Under these rules a micro business customer can expect:
- a limit on back billing,
- limits on rollover contracts,
- greater clarity of invoicing and end dates and
- clearer terms and conditions
Happily some suppliers have gone further than Ofgem requested and have included all SME (Small and Medium Enterprise) customers in their micro business policies and have further limited and in some cases completely removed their rollover terms.
To find out how your supplier fares in these policies visit our dedicated supplier pages to get all the information you need to navigate the energy market whether you're a micro, small, medium or large business.
If you'd like to understand whether you are a micro business and how you can benefit from these rules and protections simply give us a call on 0800 051 5770, we'd love to hear from you.