Energy News

Energy companies forced to warn customers of price rises

Thursday 28 April, 2011

By Martin Fagan - news@consumerchoices.co.uk

From today, energy companies are being forced to give customers 30 days notice before hiking their prices.

Under new rules that come into force today, energy suppliers intending to raise their prices now have to inform customers in writing 30 days before the price rise takes effect, said energy regulator Ofgem.

Under previous rules suppliers had 65 working days after they had increased prices to tell customers. Under the new 30-day rule, customers have time to switch before the rise comes into effect.

“Ofgem is determined to ensure that supply companies play it straight with consumers,” said Andrew Wright, Ofgem’s senior partner for markets.

“Giving customers advance warning of price rises is one way of ensuring a fairer deal for them."

On 21 March, following its review of the retail energy market, Ofgem published proposals for widespread reforms to tackle poor supplier behaviour, sweep away confusing tariffs which it said “bamboozled” customers and break the stranglehold of the “big six” on the energy market.

Commenting on the new 30-day rule, Hannah Mummery, energy expert for energy watchdog Consumer Focus, said: “People clearly need to be given fair warning if prices are going to go up, not told months after the event,”

“This welcome move will help give people the opportunity to budget for higher bills in advance, weigh up their options about whether to switch supplier and shop around.

“The challenge now is for energy firms to deliver the changes needed to make switching work for consumers and give them confidence that they're being asked to pay a fair price.”

The energy industry has until 1 June to respond.