Care England has written to Ofgem and the Department for Business, Energy and Industrial Strategy (BEIS) accusing gas suppliers of being “unduly onerous” in their practices and asking for the matter to be investigated.
It follows a review by the not-for-profit energy consultancy Box Power Cic which found that gas suppliers were not passing on recent decreases in wholesale prices to companies in the care sector.
In a letter to Ofgem, and the Department for Business, Energy and Industrial Strategy, chief executive Professor Martin Green OBE accused energy suppliers of being “unduly onerous” in their practices, saying: “We believe there can be no justification for charging such horrendous and financially crippling rates that gas suppliers are explicitly prohibited from doing so.”
“Ofgem’s supply licence stipulates that companies must take all reasonable steps to ensure that the terms of each deal for customers not locked into long-term contracts are “not unduly onerous”.
“Undoubtedly one of the most pressing issues facing the country at present is the ongoing energy crisis. The rises in wholesale electricity and gas prices are having a profound effect on businesses and individuals across the country.
“However, there are few environments where the impact has been as severe and devastating as in the adult social care sector, which is required to heat facilities this winter and increase ventilation by letting in fresh air into indoor spaces.”
Box Power noted that 1,172p p/therm (40p/kwh) prices bear no relation to the daily spot price of just 3.2p/kwh currently, with December 2022 priced at 8.3p/kwh. (1p kwh = 29.3 therm). The analysis added that even lower prices at 25p/kwh by some gas suppliers were still unjustified.
The government announced support on business energy prices which runs until March 2023 in September.
An Ofgem spokesperson said:
“Ofgem’s priority is to protect consumers and businesses and ensure they pay a fair price for their energy. That’s why we are working with government and stakeholders to determine if further action or assistance is needed to help protect businesses including care homes and their residents, including whether a review on compliance of existing obligations is needed. We have a track record of robust action in compliance and enforcement where needed. We have received the letter from Care England and will respond to it in due course.”