Micro or Non Micro
Following research by the energy industry regulator Ofgem that showed business customers were receiving a bad deal from the energy market, new measures have been introduced to give extra protection for small business energy consumers.
The key benefit to micro business customers from the new legislation is the reduction of the automatic renewal length. All micro business contracts signed from 18th January 2010 can only be automatically renewed for a period of 12 months.
What is a microbusiness?
A Microbusiness is a business that has fewer than 10 employees or part time equivalent and an annual turnover or balance sheet not exceeding Euros 2 million – OR an annual consumption of electricity below 55,000kWh – OR an annual consumption of gas below 200,000kWh.
Consumption values, employee numbers and turnover, relate to the total across the whole of the business and all its premises. You are classified as a Microbusiness if you meet any one of the conditions above, thus if the gas is above 200,000kWh but the electric below 55,000kWh, you are a Microbusiness.
What are the new protections?
Before you sign a new contract
- Before you enter an energy contract your supplier must explain the key terms and conditions to you, this applies to contracts agreed on the phone or in person
- Within 10 days of you signing a contract you should receive written copies of the contract with full terms and conditions including renewal terms
- If your contract is fixed for a period of time (for example 12 months) you can notify your supplier at any time during your contract that you do not wish no renew the contract once it expires, you will still have to see out your contract but your contract will not be automatically renewed once it expires
When your contract ends
- 60 – 120 days before the end of your contract your supplier must send you a letter outlining the key contract renewal terms, this will include information on the new prices you may pay – including what will happen if you take no action and what will happen if you do not want to renew your contract
- Once you have received your statement of renewal terms you have 30 days in which to contact your supplier and tell them you would like to negotiate a new contract or change to another energy supplier
- Once you have notified your supplier you would like to negotiate a new deal your supplier will then offer you new contracts, one of these contract must be valid for the duration of the 30 day period
- If you do not tell your supplier you want to renegotiate your contract or change supplier within this 30 day period your existing contract terms can only be rolled over for a further 12 months
What if my business is classified as a Non-micro business ? Unfortunately these new regulations only apply to micro business, if your business is classified as non-micro you do not benefit from the new legislation and it is imperative that your manage your energy contracts either yourself or through a third party very closely.