OFGEM: Not Intervening on Exorbitant Out-Of-Contract Rates

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Alpine Utilities  reached out to OFGEM to intervene against exorbitant out-of-contract rates.

Alpine wrote:

I am looking at a recent electricity bill from British Gas to a customer, who unfortunately got out of contract for a few days.

The charges are exorbitant with 31.162p/kwh, which is about double the contract rate.


While domestic standard rates have successfully been capped, some suppliers still exploit business customers when they are out-of-contract.

Although, it is perfectly acceptable to charge a higher rate to customers out-of-contract, but double the price is an unjustifiable rip-off.


As customers often go out-of-contract due no fault of their own and sometimes not even realising it, and in such cases are at the whim of the suppliers, I would like to see OFGEM to limit the rate suppliers can charge to customers on a default rate.


Since, going out-of-contract is often a result of missed, invalid or late termination, a probe by OFGEM into the termination/renewal issue may be in place as well. Some suppliers lap a termination if not supply has not been transferred within 30 days. Again, an illogical clause to the detriment of the customers.

Many Thanks

OFGEM however declined: 

Ofgem does not have a direct role in investigating or resolving individual consumer complaints and therefore we are unable to provide specific advice in response to your query. However, in order to give as much assistance as possible, we have provided some information below which you may find helpful. Please note that the information provided is not intended as any form of legal advice or to be fully comprehensive.


With the exception of imposing a Price Cap on suppliers covering prepaymentstandard variable and default energy tariffs, it is not Ofgem’s statutory role to dictate what prices suppliers charge, nor any tariff entry criteria they wish to apply, nor the types of tariff on offer. These are commercial decisions that suppliers must make themselves. Ofgem does not agree prices with suppliers, and it is not for Ofgem to comment on or take enforcement action over particular prices / tariffs being charged by suppliers, provided that they do not exceed the price cap levels (if the tariffs are of the type covered by the Price Cap) and are not otherwise unlawful.


The consumer should check the terms and conditions of the energy contract they signed up to for all relevant information relating to length of term, termination fees etc and refer to the energy supplier for further clarification if required.


I hope this has been helpful.

Mr Lande, Director of Alpine Utilities commented: Ripping off customers at any stage is unacceptable, and we would expect the government to take action against such malpractice. OFGEM should not hide behind a principle of it is not Ofgem’s statutory role to dictate what prices suppliers charge  

If they managed to impose a Price Cap on domestic suppliers, the should be able to do the same for micro-businesses.