September 3, 2007
Utilita, the gas and electricity supplier who re-launched in the domestic energy market after a fourteen month break in February 2007 are the first supplier to take advantage of the recent OFGEM decision to allow domestic energy customers to be offered a 12 month contract, thereby ending of what is known as the 28 day rule.
The 28 day rule required domestic suppliers to offer contracts that could be terminated on 28 days notice. This was originally put in place to prevent existing suppliers signing up customers on long-term contracts to restrict competition from new suppliers.
From a supplier viewpoint this will allow suppliers to develop innovative energy saving products which should ultimately help the consumer reduce their energy bills. Typical savings of some energy efficiency measures can be found in the table below.
However, from a consumer viewpoint there is a concern that these type of contracts will be sold to consumers who are not fully aware that they are tied into a long term contract.