Watchdog Urges Faster Energy Tariff Reform

Written By Unknown on Sabtu, 22 Juni 2013 | 11.46

The energy watchdog's proposals for a "simpler and fairer" energy market have drawn a mixed response from consumer groups, as the regulator called on suppliers to adopt them "as quickly as possible".

Regulator Ofgem has told suppliers to limit themselves to four "core" tariffs each for electricity and gas and for each type of payment, while all information suppliers send to consumers must be "simplified, more engaging and personalised".

Suppliers will use a new Tariff Comparison Rate (TCR), which the regulator claims will help to simplify the selection process for consumers.

And new enforceable standards of conduct will enable Ofgem to take action against suppliers where they have failed to treat customers fairly.

Today Ofgem launched the last statutory consultation before it decides whether to implement "the most radical reforms to the retail market since competition began".

The reforms are expected to come into effect from the summer, but Ofgem said there was nothing to stop suppliers moving to deliver them now.

Ofgem senior partner for markets, Andrew Wright, said: "Our reforms today are the blueprint for the simpler, clearer and fairer energy market that consumers deserve.

"This will provide them with the choices they want alongside the simplicity they need.

UK power station Both electricity and gas companies have used complex tariff systems

"They have been delivered following two years of engagement with consumers and industry in the most comprehensive ever review of the retail market.

However consumer watchdog Which? said it was "hugely disappointing" that Ofgem had pressed ahead with the TCR format.

Which? executive director Richard Lloyd said: "While these new rules will help make the market simpler and fairer it's hugely disappointing to see the regulator sticking to its fundamentally flawed idea of how energy prices should be presented.

"This will fail to help people find the best deal easily and could even mislead millions into paying over the odds for their energy."

Trade association Energy UK defended the firms and said: "Energy suppliers have already pressed ahead with providing customers with simpler, clearer tariffs.

"Our members have dramatically reduced the number of tariffs, simplified structures and pledged to help all customers move to the deal that suits them best."

But Energy Secretary Ed Davey has continued to push for faster reform and said: "I welcome the continued progress of Ofgem's reform of the retail energy market.

"It's simply scandalous that over eight in 10 of households, including the most vulnerable, are put off switching or engaging in the energy market.

"That's why I'm backing Ofgem's reforms to make it easier to compare tariffs and switch suppliers. These reforms are the fastest way to speed up delivery of simpler bills and a fairer system."


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