OFGEM to investigate 'harm' caused by energy costs

18-Nov-2022 - Last updated on 18-Nov-2022 at 11:01 GMT

Important role: OFGEM to investigate harm caused by bad practice regarding non-domestic suppliers (Credit: Getty/J J D)

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OFGEM’s investigations into reports on the pressure and “harm” caused by non-domestic contacts amid the on-going energy crisis are an “important part” of the regulator’s role, the British Beer & Pub Association (BBPA) has stated.

This follows a letter, sent by the energy regulator on Wednesday (16 November), to all non-domestic suppliers calling out examples of “bad practice” such as a lack of contract offers for businesses and excessive risk premiums or additional charges as well as delayed responses.

BBPA chief executive Emma McClarkin said: “After monitoring these issues closely for months and supplying numerous cases of extremely poor practice by non-domestic energy suppliers from pubs and brewers from across our membership, it is good to see OFGEM recognising and intervening on issues that have been causing business owners stress, anxiety and extreme extra cost pressures for months.

Crippling energy bills

“Outside of the energy cap, suppliers have sought to make money elsewhere, by increasing prices on other parts of bills not covered by the cap and cancelling contracts at short notice.

“At a time when energy bills are still crippling pub and brewing businesses it is essential OFGEM continues to investigate these practices.”

Furthermore, the OFGEM letter explained the regulator understood suppliers have been managing increased market and debt risks but noted they should not profit from the current state of the market in a way that negatively impacts customers or subverts the intent of the Energy Bill Relief Scheme.

This comes as businesses across the sector have been struggling to survive as energy bills soared as much as 400% higher than usual, with many pubs forced to close for good, reduce the number of staff or only open on certain days to tackle the crisis.

At the mercy of suppliers

OFGEM has asked those who received the letter to respond by Wednesday 23 November and has pledged to issue a best practice guide on debt and disconnection practises by the end of this month.

McClarkin added: “Holding suppliers to account to ensure business owners are not at the mercy of suppliers is an important part of the regulator’s role.

“Pubs and brewers quite rightly expect to receive fair and transparent deals and we look forward to continuing to work with OFGEM and Government to ensure this.”