Ofgem to press ahead with radical overhaul of the retail gas and electricity market

Published on Wednesday, 22 June 2011 09:43
Posted by Scott Buckler

Ofgem today signalled its determination to press ahead with a radical overhaul of the retail energy market following wide support from consumers, Consumer Focus, Which?, CAB, Age UK and uSwitch along with independent generators and small energy suppliers (June 22nd)

Ofgem’s Chief Executive Alistair Buchanan said:

“Responses to our reforms show that there is increasing consensus across a range of consumer and business groups that in a period of rising energy prices energy suppliers have to transform the way they deal with consumers. We are also seeing signs that the penny has dropped with the Big Six and they are ready to take part constructively in the debate.
“This is why Ofgem is pressing ahead with its consultations to sweep away complex tariffs in order to expose energy suppliers’ prices to consumer power. We will also pursue breaking up the stranglehold of the Big Six on the electricity market to encourage more firms, like new arrival the Co-op, to enter the energy market and increase the competitive pressure on the Big Six.

“Our latest report on prices also gives even more impetus to the need for radical reform as it shows that turmoil in global energy markets during 2011 has pushed up wholesale costs by 30 per cent since December 2010. Now more than ever, consumers need to have confidence that competition can operate effectively in setting energy prices.”

Ofgem also reinforced the commitment it made in March to take a tough approach to enforcement action by today launching an Enterprise Act investigation into Scottish Power over potentially misleading marketing at the time of its recent price rise (see Notes to Editors).
“Our new investigation into potentially misleading marketing by Scottish Power is a further strong signal to the industry that we wish to see a sea change in the way customers are treated. Companies that fail to play it straight with consumers need to understand that they risk facing enforcement action,” Mr Buchanan said.

Scottish Power is also under investigation to see whether the difference between their Standard Credit and Direct Debit tariffs are cost reflective and, along with EDF Energy, npower, and SSE, as to whether the company has missold energy to customers.
Ofgem has also received broad encouragement from consumer groups and businesses to look at more options to help vulnerable consumers and small firms.

Source: Ofgem

The views expressed in the contents below are those of our users and do not necessarily reflect the views of GovToday.

Add comment