Tuesday 18 February 2014

Energy contract rollovers could be useful “trigger”

Energy contract rollovers could be useful “trigger”

Businesses being rolled onto a new energy tariff when their contract runs out could be a good “trigger” to act according to a consumer group.

Ofgem has shied away from banning rollovers outright, on Friday announcing it will cut the number of days’ notice a business can give to switch supplier to 30 days rather than around the 30-90 days they are currently.

Experts suggested this wasn’t a disaster for businesses.

Andrew Hallett, from Consumer Futures said: “Rollover contracts can offer some protection to customers in that, by definition, they prevent a consumer, particularly the disengaged consumer, from unwittingly ending up on more expensive out-of-contract rates.”

An “evergreen” tariff could avoid small firms having to pay more if their contract expires.

He said: “Many very small micro businesses engage with the market in a similar way to domestic consumers and may find the need to contract regularly onerous and confusing.

“We propose one solution to this would be for suppliers to develop evergreen tariffs at this small end of the market – evergreen tariffs being like most domestic tariffs whereby there is no timeout and in most cases the price can go up and down.”

Written by

Bruna Pinhoni

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