Energy regulator Ofgem has imposed a 12-month limit on backbilling for microbusinesses, putting an end to retailers receiving excessive backbills.

Announcing the new rules, which will come into force this November, Ofgem said: “Many suppliers have signed up to, or follow, a voluntary agreement not to backbill customers past 12 months. However, the voluntary agreement does not cover all suppliers, and those that have signed up do not always follow this agreement. Ofgem, which consulted on this issue last year, has decided to ban all domestic and microbusiness suppliers from issuing backbills for energy used more than 12 months ago.”

The news has been welcomed by the Association of Convenience Stores (ACS), which has been campaigning to reduce backbilling for several years.

ACS chief executive James Lowman said: “Ofgem’s announcement will be a welcome relief to many retailers who have been the victim of huge backdated bills totalling thousands of pounds, often at no fault of their own.

“The 12 month limit on backbilling is long overdue, and is an issue that ACS has been campaigning on for many years. We believe that the vast majority of independent retailers operating in the convenience sector have no more expertise or resources to deal with energy companies than domestic consumers, and as such should be provided the same protections. This announcement is a step closer to that goal.”

A business consumer is defined as a microbusiness if they meet one of the following criteria:

•             employs fewer than 10 employees (or their full time equivalent) and has an annual turnover or balance sheet no greater than €2 million; or

•             uses no more than 100,000 kWh of electricity per year; or

•             uses no more than 293,000 kWh of gas per year

The full announcement from Ofgem is available here:https://www.ofgem.gov.uk/publications-and-updates/ofgem-bans-suppliers-backbilling-customers-beyond-12-months