New powers to force energy companies to compensate domestic consumers who have been subjected to unfair trading practices must be extended to protect small businesses, the Association of Convenience Stores (ACS) has warned.

The provision, included as part of the government’s new Energy Bill, supplements Ofgem’s current power to fine energy companies up to 10% of their annual turnover where licence conditions have been breached.

Responding to the Bill, ACS public affairs director Shane Brenan said it was imperative that small businesses be included in the plans.

“We think this is a good principle and we welcome it, however we need reassurance that this protection will be extended to small business,” he told Convenience Store.

In a consultation on the issue earlier this year, Ofgem had suggested that compensation could be issued on a ‘pound for pound basis where consumers have suffered a measurable loss’, with good will payments where it is not easy to determine the loss to the customer.

The ACS would be doing everything in its power to ensure that ministers understood the challenges faced by small businesses, and that unfair practices such as backbilling, also be recognised as a breach of licence conditions, he added.

“As the Bill proceeds through parliament we will endeavour to make them see this,” he added.

The Energy Bill will also see an increase in the Levy Control Framework budget from £2.35 bn to £7.6bn, an occurrence which will allow energy suppliers to charge their customers more, as they attempt to raise money towards the creation of a low carbon infrastructure by 2020. 

However, unveiling the Bill, energy minister Ed Davey dismissed claims that the measure would prompt energy bills to soar, predicting instead that the average household bill would be 7% lower in 2020 than it would be without energy and climate change policies being pursued.

“In a world of rising energy prices, pressure on resources and economic uncertainty we simply cannot afford to miss the huge opportunities offered by greater energy efficiency,” Davey said. “That is why the coalition government is acting now to make Britain’s energy supply fit for the 21st century.”

The government has also launched a consultation on how further electricity savings can be secured.

A range of options have been put on the table, including a proposal to reward households and businesses who make efficiency improvements, and targeted financial incentives for replacing older technologies with new more efficient equipment.