Ofgem Condition 7A rethinks ‘micro-business’

adminBusiness Electricity, Business Gas, Utilities Market Regulation

The industry regulator is widening the scope of its Standard License Condition 7A (SLC7A) to cover 150,000 more small businesses.

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Since January 2010, Condition 7A has stopped energy suppliers from using sneaky tactics designed to roll customers into expensive long-term contracts if they don’t terminate their contract in due time.

The condition means that smaller businesses can now terminate their contract at any time (instead of during a specified window) and can only be rolled into a new contract for a maximum of 12 months.

See our information page on Ofgem Condition 7A for specific details of what defines a micro-business and what Condition 7A means.

Ofgem said on their website: “Under our proposals we will extend existing safeguards that ensure clear contract terms for micro-businesses to cover a further 150,000 small businesses.”

The proposal is that any business spending around £10,000 per annum on electricity or gas will be protected by SLC7A, taking the total coverage of the market to around 90% of organisations.

These are still just proposals, and will likely not come into effect until summer 2013 when the consultation phase is over.