Four of 'big six' energy suppliers to end automatic rollover contracts

18-Sep-2013 - Last updated on 19-Sep-2013 at 14:19 GMT

Scottish Power, E.ON, SSE and NPower will all terminate the contracts from April

Four of the ‘big six’ energy suppliers have confirmed they will be terminating the use of automatic rollover business contracts, following British Gas’s lead in July.

Scottish Power is the latest company to announce that it will no longer offer the contracts to new small businesses from April 2014, and later in 2014 for existing customers. It said the move will provide customers with greater choice and control over their energy supply.

The firm will also reduce the period for back billing business customers to 12 months from January 2014, after reducing the period to 24 months at the beginning of this year.

E.ON, SSE and Npower have also confirmed that they will be ending the contracts from April, instead offering customers a choice of fixed and variable term options.

No exit fees

EDF Energy said it will not be terminating the contracts, which are widely thought to penalise small businesses, but will offer fixed prices with no exit fees to small business customers whose contracts are automatically renewed. This means those who do not contact the company at the end of their contract will now have their prices frozen for a year at a new rate but will have the freedom to leave for free at any time if they find a better deal during that period.

The overwhelming response comes after the Office of Gas and Electricity Markets (Ofgem) began reviewing the use of the contracts in July. The Government regulator has called for evidence from suppliers and consumers in the non-domestic market and confirmed that a consultation is expected to take place in late 2013 or early 2014.

Fair power campaign

Jon Hill, a multiple operator based in Cheltenham, launched a campaign against the contracts last week after he had to pay £38,000 when Npower’s supply rates dramatically increased overnight.

Hill said he would continue running the ‘Fair Power 4 All’ campaign, with fellow multiple operator Paul Soden, despite the fact the UK’s largest energy suppliers have reviewed their use.

“I just don’t believe them,” he said. “The suppliers may say they are ending the contracts but they could well disguise them as something else. You can’t change a culture overnight.”

He urged licensees to share their stories about their energy company experiences and join the campaign at www.fairpower4all.com.