Tag Archives: Ofgem

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Ofgem

Ofgem to crack down on unscrupulous energy brokers

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Envantage Ltd has welcomed the moves by Ofgem, aimed at protecting small businesses and preventing poor practise by some energy firms. Does more need to be done for larger businesses?

Ofgem is to start working with Citizens Advice to help microbusinesses avoid bad energy deals, which have resulted in some charities, care homes and other smaller businesses paying as much as 50% commission on energy rates.

Ofgem

Under the new rules, which come into force later this year, all energy brokers will be forced to disclose how much commission they charge, and to offer a 14 day cooling-off period for new deals.

Who will be protected?

The regulations are aimed at microbusinesses, with Ofgem partnering with Citizens Advice to help make business owners more aware of their rights and the new regulations.

Envantage welcomes this move by Ofgem but Colin Hindmarsh, Envantage’s Managing Director, was keen to point out that the problem isn’t restricted to very small businesses: “While we’re very encouraged by the new rules and how they should protect microbusinesses, it’s important for larger businesses to be aware of the possibility that their energy broker may charge high commissions. Most energy brokers are honest, so if your broker isn’t disclosing how much you’re paying for their services up front, you have the right to ask.

If you are unsure about your current energy deal, we can help to find out whether it’s the right deal for your business. Give Envantage’s experts a call on 0161 448 7722 or find our contact details here.


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Ofgem

Ofgem’s Targeted Charging Review – What does it mean for energy users?

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Ofgem’s recently-announced Targeted Charging Review will change the way the electricity networks recover charges. The aim of the review is to spread the cost of maintaining the electricity grid more evenly across business and households, and to modernise the UK’s electricity network.

Ofgem

The changes will apply from 2022, which is earlier than many energy users were expecting, and might mean that changes to your electricity charging will affect how you plan your energy use.

What are the most important changes?

Triad charges will be replaced by a fixed charge system. This will be a more simple method of collecting residual charges for the energy sector overall, with a fixed charge, irrespective of business size or location.

This will be put in place from 1st April 2022, but it is recommended you review your load management strategy now.

How will this affect your energy charges?

How these changes affect your business depends on how you currently use electricity.

If you are a large energy user who has used load management to avoid Triad charges, you will not benefit from lower charges as a result of this any longer. Some large energy users who have used embedded generation to export electricity to the Grid during Triad periods will also lose the benefits that this has given in past years. In these cases, you are likely to see charges increase.

If, on the other hand, your business is a large energy user but is not able to load manage at Triad periods, your electricity costs may reduce thanks to the overall costs being more evenly spread amongst users.

Half-hourly metered supplies will be charged based on their Agreed Supply Capacity (ASC) and voltage level. Smaller business energy users, with no specific Agreed Supply Capacity (ASC), will join charging bands based on their volume of consumption.

What Should You Do To Prepare?

While the justification for load management is largely removed by these changes, it is important that your business understands how it will be affected.

If you have become used to reducing your load during times of peak demand, there is an opportunity to review your energy use and identify whether your site can operate more efficiently under the new arrangements.

To assess your opportunities or threats from this important change, contact Envantage today for detailed advice, relevant to your specific situation. Call us on 0800 254 0577 or email savings@envantage.co.uk.


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