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Electricity and gas that is purchased from an authorised supplier can often be sold on to others by the primary purchaser. This is known as resale. Ofgem sets the rules that govern the resale of electricity and gas; these rules are known as the Maximum Resale Price provisions or MRP.
The MRP provisions only apply to gas and electricity consumed for domestic purposes.
The maximum amount landlords or “resellers” are permitted to charge for gas or electricity is the amount they have paid for it, plus VAT at the appropriate rate. If the existing energy supplier applies a standing charge this can be recovered on pro-rata basis according to the usage of all those supplied at a particular property or site.
In December 2012 Ofgem published a consultation letter proposing to clarify that the MRP should not apply to electricity resold for use by electric vehicles. This consultation is open until 28 February 2013 and can be found at the following link:
Consultation on the application of the MRP to the resale of electricity for use by electric vehicles - [PDF]
The MRP provisions do not apply to gas or electricity resold for use in commercial premises. In these circumstances, it is likely that the cost of energy use is set as a bilateral agreement between the landlord and tenant. The issue therefore becomes a contractual matter between the contracting parties.
Where a commercial consumer establishes a breach of contractual obligations, or questions the validity of the terms and conditions of a contract, he/she is advised to seek independent legal advice.
Ofgem has published more detailed guidance for resellers [PDF] that is equally useful for tenants or consumers.
Further detailed information about the formation of this policy can be viewed at the links below: