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The Energy White Paper committed Government to work with the regulator, Ofgem, energy suppliers and others to create an effective market in energy services including looking into the perceived barriers of the 28-day rule.
A two-year pilot scheme to encourage energy services in the domestic sector was announced by Patricia Hewitt in November 2003. This involves relaxing the 28-day rule, which is the licence requirement on energy suppliers, giving the householder the right to terminate their energy supply contract at 28 days notice.
The pilot commenced in May 2004. Patricia Hewitt’s announcement of the pilot followed on from the work of the Energy Services Working Group which presented its interim report to Ministers in October 2003 and the final report in January 2004.
During the pilot, energy suppliers can sign up to 4 per cent of their customer accounts or 50,000 customer accounts (whichever is the larger) to deliver a range of energy services. This enables suppliers to sell a range of services such as insulation packages consisting of cavity wall insulation, topping up the loft insulation and improved insulation of the water tank. A package like this could save a household £130 per annum compared to previous running costs.