The plans would enable enterprises with double the current expenditure on electricity or gas to have the same redress rights as those covered by the current definition of microbusinesses.
Under the existing definition, a microbusiness consumers less than 55,000kWh of electricity or less than 200,000kWh of gas, and has fewer than 10 staff and an annual turnover not exceeding €2 million.
This means microbusinesses that typically spend £5,000 on each electricity and gas have access to the same form of redress arrangements as domestic customers.
Businesses that currently spend more than £5,000 per fuel in a year are expected to use the legal system to settle disputes with their energy provider.
The changes to the definition would allow micro-businesses to consumer up to 100,000kWh of electricity and 293,000kWh of gas – a typical spend of £10,000 per fuel per year – to have the same form of redress arrangements as existing microbusiness and domestic customers.
Decc’ planned changes would coincide with changes Ofgem is set to make to the definition of a microbusiness, which from 31 March this year will change to the 100,000kWh and 293,000kWh limits for electricity and gas respectively.
In the consultation, Decc said if the proposal is not adopted “there will be a two-tier definition of a microbusiness”, adding “this is likely to cause confusion amongst customers, suppliers and other organisations providing advice to microbusinesses.”
John Allan, national chairman at the Federation of Small Businesses, said: “Microbusinesses are really suffering from high energy prices so being eligible for the same redress arrangements as domestic consumers to settle disputes with energy providers is a sensible step.
“We now want to see action from the suppliers to make their prices more transparent. As it stands small firms have a torrid time if they want to see how much they would pay when moving from one supplier to another.”
The consultation on Decc’s proposals closes on 14 February 2014 at 12am.