21 Jun 2013
Ofgem is urging energy firms to speed up their tariff reforms to ensure that bills are fairer and easier to understand. The move comes after David Cameron urged suppliers in December to offer better tariffs for consumers and the regulator is now pressing forward to deliver this pledge.
Ofgem has told suppliers to offer only four core electricity and gas tariffs, allowing consumers to simply compare and find the best option for them. A new comparison rate will make the selection process more engaging according to Ofgem, who are carrying out final consultations.
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. They have been delivered following two years of engagement with consumers and industry in the most comprehensive review ever of the retail market”.
Consumer groups have questioned how feasible the plans are, and whether they will actually help consumers or lead to further confusion. 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.”
The Government continues to push for faster reforms to enable consumers to compare and switch tariffs more easily. The changes are due to come into effect this year but Ofgem said suppliers are free to start implementing the reforms now as part of restoring consumer confidence in the energy market.