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Terms of reference - Energy sector

These are the Terms of Reference approved by the Board, in line with the Articles of Association of the Company (herein “The Energy Ombudsman”).

1. Interpretation

1.1 The definitions, below, apply to both this Annex and the Terms of Reference in relation to complaints brought to the Energy Ombudsman against Participating Companies:

“Award” means the compensation awarded to the Complainant not exceeding £10,000 (inclusive of VAT, if any) per complaint;

“Customer” means either a domestic customer or micro business consumer who is party to a contract with a Participating Company of the Energy Ombudsman for the supply or provision of any service falling within the jurisdiction of the Ombudsman and The Energy Ombudsman. For the avoidance of doubt, where the context allows, it includes a person who is connected to or seeks to be connected to, the network owned or operated by a Participating Company;

“Domestic customer” means a customer supplied or requiring to be supplied with gas or electricity at domestic premises, as defined in Condition 6 of the Standard Conditions of Electricity Supply Licence and Condition 6 of the Standard Conditions of Gas Supply Licence. It also means a customer of heat or hot water energy who receives the service in a capacity that is wholly or mainly outside of that individual’s trade, business, craft or profession;

“Energy Network Operator” means a distributor of energy who holds a UK gas transporter and/or electricity distribution licence;

“Energy Supplier” means a provider of energy who holds a supply licence for the supply of gas and/or electricity to domestic and/or micro business consumers;

“Heat Energy Supplier” means a supplier of heat or hot water energy;

“Licence” refers to either:

  • (a) a gas licence, being;
  • (i) a licence under section 7A(1) of the Gas Act 1986 (supply licences); or
  • (ii) a licence under section 7(2) of the Gas Act 1986 (transportation licences); or
  • (b) an electricity licence, being;
  • (i) a licence under section 6(1)(d) of the Electricity Act 1989 (supply licences); or
  • (ii) a licence under section 6(1)(c) of the Electricity Act 1989 (distribution licences);

“Micro business consumer” is a ‘relevant consumer’ as defined in the Gas and Electricity Regulated Providers (Redress Scheme) Order 2008 and as further defined, from time to time, by the Gas and Electricity Markets Authority or Ofgem. As of 31 March 2014 a ‘micro business’ is defined as one with;

  • (i) An annual consumption of electricity of not more than 100,000 kWh; or
  • (ii) An annual consumption of gas of not more than 293,000 kWh; or iii)
  • (iii) Fewer than the equivalent of ten full time employees and an annual turnover or annual balance sheet not exceeding €2 million. Where the micro business receives gas and electricity supplied by the same energy supplier, the annual consumption of gas and electricity shall be treated separately for the purposes of determining its capacity to make a complaint to The Energy Ombudsman.

“The Energy Ombudsman” means the Ombudsman Service provided to Energy Suppliers, including Heat Energy Suppliers, and Energy Network Operators;

“Participating Company” means an Energy Supplier, Energy Network Operator or Heat Energy Supplier admitted into The Energy Ombudsman in accordance with the Terms of Reference, the Membership Rules for Participating Companies and the present Annex and, as the context so requires, each and/or any of its subsidiary undertakings from time to time which has put its relevant services under the jurisdiction of the Ombudsman and The Energy Ombudsman;

“Sector Liaison Panel/SLP” means the Sector Liaison Panel referred to in Paragraph 6 of this Annex;

2. Eligibility to become a Participating Company in The Energy Ombudsman

2.1 Companies that are obliged to become Participating Companies in The Energy Ombudsman are those companies that supply energy to domestic customers and micro business consumers in the following capacities;

  • (a) all energy suppliers who hold a supply licence in respect of domestic and/or micro business consumers for the supply of gas and/or electricity;
  • (b) all electricity distributors and gas transporters who hold a licence for electricity distribution or gas transportation;
  • (c) all heat energy suppliers who are members of the Heat Trust.
  • (d) all heat suppliers who have responsibilities under the Energy Bill Relief Scheme Pass-Through Requirement (Heat Suppliers) (England and Wales and Scotland) Regulations 2022.
  • (e) all heat suppliers who have responsibilities under the Energy Bills Discount Scheme Pass-Through Requirement (Heat Suppliers) Regulations 2023.
  • (f) all heat suppliers who have responsibilities under the Non-Domestic Alternative Fuel Payment Pass Through Requirement and Amendment Regulations 2023.
2.2 Any other entity that the Ombudsman deems appropriate to admit, upon applying, may become a Participating Company, after considering the products and services it supplies.


3. Services

3.1 The services provided by Participating Companies of The Energy Ombudsman which will be covered by, and fall within the jurisdiction of, the Ombudsman and the Energy Ombudsman are;
  • (a) the services associated with the metering and billing of customers for the supply of energy, including heat and hot water energy;
  • (b) the transfer of customers between energy suppliers;
  • (c) the sale of energy products and services, including heat and hot water energy;
  • (d) the provision of regulated products and services by holders of a gas transportation licence or electricity distribution licence;
  • (e) the provision of heat energy products and services; and
  • (f) services relating to certain duties set out in the Energy Bill Relief Scheme Pass-Through Requirement (Heat Suppliers) (England and Wales and Scotland) Regulations 2022, namely that the heat supplier:
    • notified the consumer that it has benefited from the EBRS;
    • notified the consumer of how it will pass through the benefit from the EBRS;
    • passed on the scheme benefit within the timeframe required by the Regulations;
    • otherwise complied with the requirements to pass through the EBRS benefit
  • (g) services relating to certain duties set out in the Energy Bills Discount Scheme Pass-Through Requirement (Heat Suppliers) Regulations 2023, namely that the heat supplier:
    • notified the consumer that it has benefited from the EBDS;
    • notified the consumer of how or when it will pass on the benefit of the higher heat network EBDS discount rate;
    • passed on the EBDS scheme benefit within the timeframe required by the Regulations;
    • otherwise complied with the requirements to pass through the EBDS benefit.

4. Complainants

4.1 Further to, and in addition to, the provisions of paragraphs 3 and 6 of the Terms of Reference, the Ombudsman and the Energy Ombudsman shall only have jurisdiction in relation to a complaint against a Participating Company if the person making the complaint;

  • (a) was, at the time the subject matter of the complaint arose, a customer with an effective contract or deemed contract with a Participating Company; or
  • (b) was, at the time the subject matter of the complaint arose, a customer with a grievance with a transfer to or from a Participating Company; or(c) was, at the time the subject of the complaint arose connected to the network of a Participating Company, or would have been so; or
  • (d) had, at or prior to the time the subject matter of the complaint arose, applied, or been solicited to become, a customer with the Participating Company; or
  • (e) is acting on behalf, and with the consent, of any person falling within the scope of paragraphs 4.1 (a), (b), (c) and (d), above.

5. Limits on the Ombudsman’s powers

5.1 The Ombudsman shall not accept a complaint about a matter;

  • (a) which concerns or relates to pipework, conduit, cabling or wiring which is not the responsibility of a Participating Company of the Energy Ombudsman;
  • (b) which is about a Heat Trust member and concerns infrastructure or equipment beyond the point of delivery;
  • (c) which concerns a dispute solely between providers of energy supply, electricity distribution and gas transportation services that fall within the jurisdiction of the Energy Ombudsman.

6. Sector Liaison Panel

6.1 The Energy Ombudsman shall hold a Sector Liaison Panel whose constitution and remit will be determined from time to time by the Board.

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