Explainer

Ofgem rules for business energy contracts: what changed and what suppliers must do

Since 2024 Ofgem has extended much stronger protections to business energy customers. Here are the rules on broker fees, standards of conduct, complaints and the Energy Ombudsman, deemed rates and compensation, and what they mean for suppliers and brokers.

By Christopher Fagan, Managing Partner, PEF Consulting Partners

The non domestic market review

In April 2024 Ofgem confirmed a package of protections for business customers following its review of the non domestic market. The changes came into force in stages through 2024.

Change Who it covers From
Standards of conduct, treating customers fairly All non domestic customers 1 July 2024
Broker fees shown in the principal terms of the contract All business customers Contracts signed from 1 October 2024
Complaints handling standards and signposting to the Energy Ombudsman and Citizens Advice Small businesses 19 December 2024
Suppliers may only use brokers that belong to a redress scheme Small businesses 19 December 2024
Energy Ombudsman access, with the maximum non domestic award raised from £10,000 to £20,000 Small businesses 19 December 2024

What counts as a small business

For these rules, a small business has fewer than 50 employees and either turnover of £6.5 million or less or a balance sheet of £5 million or less, or uses no more than 200,000 kWh of electricity or 500,000 kWh of gas a year.

Deemed and out of contract rates

Deemed contract terms must not be unduly onerous. Ofgem’s guidance of November 2023 expects suppliers to set deemed rates by customer class and not to inflate them to push customers onto fixed contracts.

Broker regulation is coming

In October 2025 the government decided that energy brokers should be regulated, with Ofgem as the regulator. That needs legislation, and broker regulation was included in the Energy Independence Bill announced in May 2026.

Guaranteed standards of performance

Suppliers must pay automatic compensation when they miss guaranteed standards, such as completing a switch on time, avoiding erroneous transfers, keeping appointments, and issuing final bills and credit refunds. The payment rose from £30 to £40 for breaches from 2 January 2025, with a further £40 if it is not paid within ten working days. New smart meter standards from February 2026 also carry £40 payments, and the appointments standard covers microbusinesses.

What suppliers and brokers should do

Back billing protection also applies to microbusinesses; see Ofgem back billing rules.

Related reading: Ofgem compliance support, energy supplier licence compliance, the free Ofgem compliance readiness check, what Ofgem is and does.

Common questions

Does Ofgem regulate business energy?

Yes. Supply licences cover non domestic supply, and since 2024 Ofgem has extended standards of conduct to all business customers and added further protections for small businesses.

Can a small business complain to the Energy Ombudsman?

Yes. Since 19 December 2024 small businesses can take unresolved complaints to the Energy Ombudsman, which can award up to £20,000 for non domestic customers.

Do brokers have to disclose their commission?

Suppliers must show broker fees in the principal terms of contracts signed from 1 October 2024, for all business customers.

What are guaranteed standards of performance?

Service standards that suppliers must meet, such as completing switches on time and keeping appointments, with automatic £40 compensation payments when they do not.

If your business customer processes were designed before 2024, they are probably not compliant with all of this. A short review will show where the gaps are.

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