The regulator concluded that suppliers could do more to protect small businesses (Micro Businesses) and offer greater benefits to customers and set out a number of proposals aimed at providing a fairer deal for the small business market. The changes aim to ensure small businesses, which make up the majority of commercial customers, receive a better deal.

Under the new rules a micro-business is defined as a company which*:

Has fewer than 10 employees (or their full time equivalent) and with an annual turnover or annual balance sheet total not exceeding €2 million Euros. Please refer to link http://uk.reuters.com/business/currencies for the correct conversion rate.
Consumes less than 200,000 kWh of gas a year
Consumes less than 55,000 kWh of electricity a year.

A business only has to meet one of these criteria to qualify as a micro-business customer. *(Source: Ofgem Article Helping Small Businesses get the most out of the energy market and as set out in article 2(1) of the Gas and Electricity Regulated Providers (Redress Scheme) Order 2008 (S.I. 2008/2268)

Suppliers are now required to give micro-businesses more information on key terms and conditions before they enter into a contract and so Terms and Conditions must be supplied within 10 days from point of sale. Suppliers are now under obligation to contact customers a minimum of 60 days (but no longer than 120 calendar days) before the termination window ends to explain contract options available going forward ‘the statement’, this has been designed with the intention of preventing automatic contract roll-over. After receiving the statement of renewal terms the customer will have a notification window of approximately 30 calendar days to contact the supplier if they wish to switch or negotiate a new deal. If a supplier pitches new offers to a customer at least one of those must be in writing and valid until the end of the notice period.

Where customers do not contact their supplier in writing during the notification window and as consequence contracts do roll-over automatically, it will be for a maximum period of 12 months but the roll over can be cancelled if the customer gives notice before the end of the termination window. Customers who wish to avoid being rolled over automatically for a further fixed term period can now prevent this from happening by writing to their supplier at any point from when they agreed a fixed term contract until the end of the notification window. However, if a customer wishes to terminate or cancel the contract they must do so in accordance with the terms of the contract.

The new terms will apply going forward and so customers on existing agreements will need to wait until their current deal ends before the changes can take effect. The new regulations do mean, however, that you will need to confirm certain information to LSI when your contract is due for renewal and therefore we kindly ask in advance for your cooperation should we ask you to complete a questionnaire in order that we can classify your business correctly, LSI can then ensure that you reap the full benefits of the changes. If you have any questions relating to the new regulations please do not hesitate to contact us at clientservices@lsiutilitybroker.co.uk