Jonathan Brearley has encouraged suppliers to do “everything” they can to help small businesses facing a “cliff edge” of much higher energy bills as government support for non-domestic customers winds down from (Saturday 1 April).
Appearing on a panel at consultancy Aurora Energy’s Spring Forum conference on Wednesday, the Ofgem chief executive expressed his concern about the acute problems many firms face as the government’s Energy Bills Relief Scheme expires.
It is being replaced by the much less generous Energy Bills Discount Scheme, which will see most non-domestic customers receive unit discounts of up to £6.97/MWh and £19.61/MWh automatically applied to their gas and electricity bills.
Firms have complained that the lower discount will leave them heavily out of pocket, particularly those that signed up to contracts in the second half of last year when wholesale prices were rocketing.
Brearley said: “We need to find some commercial solutions for smaller non-domestic customers: there are small businesses out there that are facing an energy cliff edge and signed up to contracts when prices were very high.
“We are encouraging all suppliers to make sure they are doing everything they can to adjust contract terms that means the business isn’t going through something that will be existential for them,” he said, adding there must be a “sensible pragmatic basis” for a solution to the predicament facing these SMEs.
But based on the industry’s response to Covid-19, Brearley said he is optimistic that this can be achieved, while acknowledging that the sector saw an uplift in bad debt during the pandemic.
Brearley made his comments ahead of the launch today of a new government campaign to help businesses, charities and public sector bodies increase their energy efficiency and cut their bills.
The campaign, targeted at small and medium sized businesses, will offer guidance on how organisations can make significant savings while cutting emissions, from installing light and heating timers to turning down boiler flow temperature and changing light bulbs.