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Over the last two years, Ofgem has carried out a thorough review of the standard conditions of supply licences. The review has been subject to extensive public consultation. As part of that review, Ofgem considered the need to maintain a range of licence particular conditions, including the so-called 28-day rule. The rule had its origins in fears that, when the domestic market was opened to competition, suppliers might create needless barriers to customer transfers where there was no other reason – such as indebtedness – for doing so. Ofgem therefore put in place an upper limit of 28 days on the period within which a supplier must release a customer who wished to switch supplier. More details can be found on the Ofgem: supply licence review webpage.
Competition, of which the right to switch supplier is an integral part, is now well-established. Furthermore, Ofgem has taken the view that other regulation arising from general consumer law – notably the Unfair Terms in Contracts Regulations - protect a customer’s right to transfer supply in a timely manner, and that there is no need for a specific provision within supply licences. Separately, the removal of the formal limit in the licence will enable suppliers to make innovative offerings if they wish to do so, and will allow customers to take advantage of them if they are interested.
It seems that this decision has become confused with the so-called 28-day rule trial. This trial represented an attempt by Ofgem, at the request of Defra and the then DTI, to stimulate innovative energy efficiency offerings by suppliers by allowing them to waive the 28-day notice period where an energy services package was provided to the customer under a specific contract. Suppliers did not take up this opportunity in any meaningful way, and the trial lapsed. The new arrangements should allow innovative offerings without the need for a formal trial process.
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