Ofgem the industry regulator has put in place certain regulations to protect small businesses to take effect from 18th January 2010.
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.
Under the new rules a micro-business is defined as a company which*
· Has fewer than 10 employees or FTE and with an annual turnover or annual balance sheet total not exceeding 2 million euros.
· Consumes less than 200,000 kWh of gas per year
· Consumes less than 55,000kWh of electricity a year.
· A business only has to meet one of these criteria to qualify as a micro-business customer.
Suppliers are now required to give micro-businesses more information on key terms and conditions before they enter into a contract and said 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.
When customers do not contact their supplier in writing during the notification window and as a consequence contracts do roll over automatically, it will be for a maximum period of 12 months but the roll over can be terminated 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 termination window.
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 take effect.
Village halls have 'micro business' status, a fact that may have passed treasurers by and we are aware of some suppliers who have not implemented the new regulations and have sought to roll halls onto new 3 year contracts.
It has been well documented that in the past notifications of new terms came out during holiday periods, often with no time to allow committee debate. It is also the case that most halls are currently paying default standard tariffs at much higher rates than they need.
www.villagehallenergy.co.uk has launched this year to help halls secure the best deals and advice when it comes to utilities, using the leading voluntary sector brokers LSI and modeled on the successful CLA energy club.