UK energy regulator Ofgem joined in the fray today unveiling its own plans to give energy customers a “simpler, clearer and fairer” deal.
The proposals would ban energy companies from offering complex multi-tier tariffs and force uncompetitive ‘dead’ tariffs – which are no longer available to new customers – to be scrapped. Energy suppliers would also be limited to a maximum of four ‘core’ tariffs for each fuel type.
To make energy bills easier for consumers to understand, all tariffs would also have to be shown as a standing charge and single unit price.
Consumers will also have to be shown their supplier’s cheapest tariff on their bill and have access to a ‘tariff comparison rate’ to allow the comparison of ‘like for like’ tariffs across the market.
Ofgem says it will back up the plans with standards of conduct and fines for companies that do not comply.
The regulator also wants to see consumers automatically put onto the cheapest tariff at the end of fixed term contracts and encourage consumers to get together to switch collectively.
“Our plans will put an end to consumers being confused by complex tariffs and will usher in a simpler, clearer, fairer and more competitive energy market for all consumers,” says Ofgem’s chief executive Alistair Buchanan. “Suppliers have already responded with some initiatives, but these don’t go far enough. Ofgem is determined to press forward with proposals to deliver for consumers the most far-reaching shakeup of the retail energy market since competition was introduced.”
The full plans will be published by the end of the month, says Ofgem, before it starts consulting on the proposals. The regulator says it aims to start introducing the reforms next summer.
Energy Secretary Ed Davey welcomed the propsoals, commenting:
“These are the sort of measures I have been urging for some time, they represent a big step forwards in reforming our energy market to help millions of households get a better deal on their energy bills.”
For further information:
UK energy firms have to put customers on lowest tariff… or will they? (18-Oct)
UK Energy Secretary promises Energy Bill “within weeks” (18-Oct)
UK consumer group Which? calls for energy price review (17-Oct)
UK regulator Ofgem promises reform as energy suppliers’ net margins rise 733% (14-Oct 2011)
19 October 2012