EIUG believes that normal commercial arrangements should apply to industrial energy contracts. It is inappropriate for suppliers to require that they are able to block customer transfers on grounds of debt. In such circumstances, suppliers have recourse to legal measures to ensure payment, as with any other commodity contract.
EIUG supports Ofgem’s initiatives to remedy the anomalous situation where debt-blocking provisions are required to be included in industrial gas contracts, in contrast with electricity where there is no such requirement.
There is no evidence that the situation has lead to higher debt-related costs or risks in electricity, so the suggestion that this would become an issue in gas is without foundation.
It is recognised that there are concerns among multi-site users in other sectors about erroneous transfers, who may wish to retain provisions as a safeguard, but we question whether debt-blocking is the appropriate means of dealing with this.