Maximum permitted charges

Landlords who resell energy obtained from licensed suppliers are generally exempt from licensing conditions imposed by Ofgem.1Sch 4 Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 No.3270 However, Ofgem has the power to fix maximum charges for the resale of gas and electricity.2s44 EA 1989 Ofgem’s The Resale of Gas and Electricity: guidance for resellers sets out the maximum resale price and guidance.3Ofgem, The Resale of Gas and Electricity: guidance for resellers, October 2005 The maximum amount should be no more than the price the landlord pays for the supply, including any standing charges. Charges have two elements: a charge for each unit of electricity or therm of gas consumed and a ‘daily availability charge’ to cover the standing charge.

If your landlord overcharges for gas or electricity, you can recover the excess through legal action through the civil courts in a claim for the amount overcharged and interest if so directed by Ofgem. In England and Wales, this would be through the small claims court jurisdiction of the county court (see Chapter 14).4s44 EA 1989 In Scotland, equivalent procedures apply in the sheriff court. If you are overcharged, refer to The Resale of Gas and Electricity: guidance for resellers.

If your landlord undercharges, you may have to make an additional payment, but this depends on your tenancy agreement. There is no implied term (see here) that you should pay the maximum charge.

 

1     Sch 4 Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 No.3270 »

2     s44 EA 1989 »

3     Ofgem, The Resale of Gas and Electricity: guidance for resellers, October 2005 »

4     s44 EA 1989 »