MSE News: Explain your prices, Ofgem tells big six energy giants

brig

I bought a house over 10 years ago which had had the gas disconnected some time before by one of the previous owners (I don't know when). The meter had not been removed, which I think is not unusual in these cases. I have been letting the house continuously since I bought it, and have never had a gas supply there or an account with BG.

Earlier this year I was forwarded a bill by the letting agent that had been received by the current tenant (addressed to "the occupier") with a standing charge that BG had started to impose from November. I queried this with BG who said that they had had to start making a standing charge for the meter as a result of new guidelines introduced by Ofgem at the end of 2013.

Can anyone out there confirm whether this is factually correct? I am still in discussion with BG about the legality of imposing a charge when no contract has ever been in force for the supply of gas at the property during my ownership. BG seem very reluctant to refer this issue to arbitration, which I have now asked them to do several times. I will provide further updates here for anyone who is interested.

Consumerist

Under Ofgem's Retail Market Review, suppliers were required, under new licence conditions, to charge for energy in the form of a standing charge (which could, however, be set at zero) and a single unit rate for consumption. This removed the suppliers' ability to charge two tiers of unit rate without a standing charge, which was common at the time.

If you have formally complained to BG using its complaints procedure and the issue has not been resolved after eight weeks then you can refer the matter to the <Ombudsman Services: Energy> yourself.

lstar337

My understanding is that a deemed contract only starts when you use some gas.

If it has never been used, then no contract exists and no charge can be made.

I am probably completely wrong though, so don't take my word for it!

Consumerist

lstar337 wrote: »

My understanding is that a deemed contract only starts when you use some gas.

I think a deemed contract exists as soon as you move into a property which has a meter point. In the normal course of events you should take meter readings on the day you move in and pass them to the supplier(s).

I don't really know how a property can be "disconnected" from the system unless it is going to be demolished so it is likely that the property has always been connected but the original tariff had no standing charge and only consumption was paid for. If there was no consumption then there would have been no charges.

When Ofgem changed the licence conditions, the supplier probably introduced a non-zero standing charge and is now asking the occupier to pay; they should have been advised by the supplier at the time of the change.

I would say, in these circumstances, that the occupier, i.e. your tenant, is liable for the charges unless your tenancy agreement makes them your responsibility.

Advise the supplier of the name of your tenant and send them a copy of the tenancy agreement. Return the bill to the tenant.

Bluebirdman_of_Alcathays

OFGEM believe a deemed contract exists when people use energy:

https://www.ofgem.gov.uk/ofgem-publications/38477/guidance-deemed-contracts-standard-licence-condition-7.3-gas-and-electricity-supply-licences.pdf

The Electricity Act 1989 (Chapter 29 F269) is unclear -

"Where an electricity supplier supplies electricity to any premises otherwise than in pursuance of a contract, the supplier shall be deemed to have contracted with the occupier"

http://www.legislation.gov.uk/ukpga/1989/29

Does 'supplies' mean have a meter available or for the consumer to actually take use? OFGEM believe the latter, and BG the former.

Until there's a test case, we won't know for sure, but for brig's purposes, a letter telling BG about OFGEM's direction should be enough for them to leave him alone.

Consumerist

Taking Bluebirdman's comments on board, the argument would appear to be between BG and the occupier, your tenant. I would still refer BG to the tenant as it doesn't seem to be your liability, anyway.

Farway

If no gas is used, advise your tenant, or you, to switch to Ebico. The standing charge is zero pence