UK ESNZ issued consultation Introduction of a new threshold for bringing cases to the Energy Ombudsman to include small business consumers for views on expanding Gas and electricity regulated providers (redress scheme) order 2008 to include small firms.
Currently, only businesses with non-domestic energy contracts that meet UK OFGEM microbusiness definition can access dispute resolution aid against energy suppliers.
UK OFGEM consultation concluded more firms would benefit from dispute resolution.
Many small firms cannot afford legal action via the courts, while Ombudsman provides free and impartial service to consumers whose supplier issue could not be satisfied.
Consultation Summary
Proposes: add new small business definition to 2008 Order; expand redress access to businesses with up to 50 staff plus annual £6.5mn turnover or £5mn balance sheet.
This would cover a further 4% of the UK business population, bringing total percentage of those able to seek redress to 99% - at least 200,000 additional UK businesses.
Seeks feedback whether proposal is clear, and new thresholds are set at right levels.
On Apr. 4, 2024, UK ESNZ confirmed the Energy Ombudsman would expand to offer free support to small businesses and organizations regarding energy contract disputes.
Firms will be able to access free redress for the first time, to resolve energy broker disputes without costly court appearances, as a first step to prevent high charges/fees.
UK ESNZ warned energy brokers to stop targeting small organizations with hidden costs/said it aimed to consult on regulating brokers/third-party intermediaries in 2024.
Apr. 5, 2024 Responses and Outcome
On Apr. 5, 2024, UK ESNZ issued response and outcome document, and said it would expand redress via change to secondary legislation when parliamentary time allows.
Subject to Parliamentary approval, update is likely to be in force for commencement period Oct. 2024, giving all parties time to understand new definition and adapt.
Will introduce new small business definition in Gas and Electricity Regulated Providers (Redress Scheme) Order 2008, separate to the existing relevant consumer definition.
Intends to replace initially proposed annual consumption threshold for electricity from 500,000kWh to 200,000kWh, adhere to UK FCA small business thresholds, and work with UK OFGEM on alignment with statutory license conditions/legislative changes.
Will issue supplier guidance on sharing eligibility detail, with FAQ, roles/responsibilities.
Sep. 2024 Statutory Instrument
On Sep. 12, 2024, UK ESNZ issued (StIn 2024/954) and explanatory memo on the Gas and Electricity Regulated Providers (Redress Scheme) (Amendment) Order 2024.
Amendments mean that small business consumers are eligible in the same way as domestic consumers and micro businesses to utilise a redress scheme.
This scheme relates to obligations of regulated electricity and gas providers as per 2008 Order to join, in respect of certain kinds of consumer complaints.
Larger business consumers are not so eligible and are expected to resolve disputes about electricity and gas supply themselves or through the courts.
A full impact assessment has not been produced for this instrument because it is considered that no significant impact on private, voluntary or public sector is foreseen.
On Oct. 31, 2024, UK ESNZ issued guideImplementing the Statutory Instrument 2024 amending The Redress Order 2008: expanding access to redress to small business consumers for energy disputes for non-domestic suppliers & small business consumers.
Outlines: implications for UK OFGEM complaints handling standards/license conditions; main changes due to changes; adjustments suppliers and consumers need to make.
