Ofgem rules for business energy: what protects you

Ofgem is the regulator for gas and electricity suppliers in Great Britain. For households it sets a price cap; for businesses it does not. Instead it places conditions on suppliers' licences. These cover what a contract must tell you, how renewals work and how complaints are handled. This guide pulls the main rules together in plain English.

What Ofgem does not do

• No price cap. The household cap does not apply to businesses. See why there is no business energy price cap.
• No cooling-off period. A business contract, even one agreed by phone, is binding. Ofgem consulted on a cooling-off period for microbusinesses but did not implement it.
• No licensing of brokers. See are energy brokers regulated?
• Not a complaints body. Disputes go to the supplier and then the Energy Ombudsman. See complaints and the Ombudsman.

Who is protected, and how much

Protection	Microbusiness	Small business	Larger business
Standards of Conduct (treat you fairly)	Yes	Yes (since 1 Jul 2024, all sizes)	Yes (since 1 Jul 2024)
Broker costs shown in Principal Terms	Yes (since 1 Oct 2022)	Yes (contracts from 1 Oct 2024)	Yes (contracts from 1 Oct 2024)
Brokers must be in a dispute scheme	Yes (since 1 Dec 2022)	Yes (since 19 Dec 2024)	Not covered by these rules
Energy Ombudsman access	Yes	Yes (since Dec 2024)	No
No notice to switch / rollover limits / 12-month backbilling cap	Yes	No	No
Supplier must signpost you to Citizens Advice	Yes (since 1 Jul 2024)	Check with your supplier	Check with your supplier

Definitions of micro and small are in what is a microbusiness for energy.

The main rules, one by one

Principal Terms

Suppliers and brokers must make sure you understand the nature and cost of the contract. The Principal Terms (the key terms such as price, length, termination charges and any broker fee) must be brought to your attention before you agree and confirmed in writing afterwards. For phone sales they must be explained clearly, not just pointed to. If a broker is paid through your bills, the total over the contract must be shown in pounds and pence; estimates are allowed.

Standards of Conduct

From 1 July 2024 these were extended from microbusinesses to businesses of any size, so Ofgem can act against suppliers that do not treat non-domestic customers fairly.

Renewals, rollovers and notice

Microbusinesses cannot be required to give notice to switch (except under evergreen contracts, up to 30 days). Suppliers can only roll a fixed term over if they met the renewal-information requirements, you have not given notice to stop it, and the new term is 12 months or less. See rollover contracts.

Out of contract and deemed

You cannot be charged a termination fee if you are out of contract, and you can choose a contract at any time if you are on deemed rates. See deemed contracts.

Backbilling

Ofgem's ban on billing for energy used more than 12 months earlier applies to domestic and microbusiness customers only, with exceptions such as theft or obstructing meter reads. Small businesses are not covered. See business energy backbilling.

Complaints handling

Since 19 December 2024, small businesses as well as microbusinesses can take an unresolved complaint to the Energy Ombudsman, once they have waited eight weeks or received a deadlock letter. Government plans published in June 2026 would cut the wait to six weeks, but that is not yet in force.

Worked example: what the broker-cost rule shows you

Your Principal Terms state a total broker cost of £840 on a 24-month contract. That is £840 / 2 = £420 a year. If you use 28,000 kWh a year, that is £420 / 28,000 = 1.5p per kWh, built into your rates. You can now compare that quote against an alternative that charges a fixed fee, or has no broker involved. Figures are illustrative.

What the rules do not guarantee

• A fair price. Suppliers can charge what the market allows.
• That a broker found the best deal. Brokers are not obliged to search the whole market.
• Protection from your own agreement. A verbal "yes" can bind you.

Direct Ofgem regulation of brokers is expected but is not yet in force. Ofgem said in July 2026 that it expects to consult on initial proposals in 2027.

Where to get help

Citizens Advice offers free help to micro and small businesses with supplier or broker problems. Ofgem's broker guidance gives the Citizens Advice consumer helpline as 0808 223 1133 (Welsh language: 0808 223 1144). Ofgem does not investigate individual complaints.

Before you call

• Have your contract, Principal Terms and latest bills to hand.
• Know your size: staff numbers, turnover and annual kWh for each fuel.
• Note the date you first complained and any deadlock letter.

A quick glossary of Ofgem terms

• Licence condition: a rule a supplier must follow to hold its licence. Ofgem enforces these.
• Principal Terms: the key contract terms that must be highlighted to you.
• Qualifying dispute settlement scheme (QDSS): an independent scheme that brokers must belong to; see what is a QDSS.
• Deadlock letter: a final response from a supplier or broker that opens the door to the Ombudsman.
• Evergreen contract: an open-ended contract that continues until notice is given.

Recent changes to know about

Business rules have changed a fair amount since 2022. Principal Terms and broker-cost disclosure (2022), supplier-and-broker dispute scheme rules (2022, extended to small business in December 2024), the removal of notice requirements for switching (October 2022), Standards of Conduct for all sizes (July 2024) and small-business access to the Ombudsman (December 2024). Ahead, the government's plan to name Ofgem as broker regulator and the smart-meter terms for new fixed non-domestic contracts from September 2027 are both still developing; see business smart meters.

How the rules are enforced

Ofgem enforces supplier licence conditions. It can investigate and take action against suppliers that do not comply. It does not usually resolve individual disputes; that is the job of the supplier's complaints process, then the Energy Ombudsman. For the practical steps, see business energy complaints and the Ombudsman. If you think a supplier is breaching its rules on a wider scale, you can still tell Citizens Advice, which passes patterns to the regulator.

Next steps

• Check your size and what rules apply: extra protections for microbusinesses.
• Review your contract using the contract terms checklist.
• If something goes wrong, follow the dispute guide.