Energy News

Energy firms not ‘playing it straight’ with public

Monday 21 March, 2011

By Seamour Rathore - seamour@consumerchoices.co.uk

Energy bill debts are rising and the energy companies should be more sympathetic to those in difficulty, says energy regulator Ofgem.

Gas and electricity firms are failing the public with unfair pricing and too many complex tariffs, according to a new investigation.

UK energy regulator, Ofgem, has delivered a damning verdict on the “big six” energy suppliers, accusing them of “bamboozling” the public by offering over 300 different tariffs.

Ofgem says it will also refer them to the Competition Commission this year if they don’t co-operate with its set of radical new proposals to make the market more competitive.

Ofgem chief executive, Alistair Buchanan, said: “Consumers have told us that energy suppliers’ prices are too complicated.

“That’s why we are planning to sweep away this complexity so suppliers’ prices are fully exposed to allow easy price comparisons.”

Furthermore, research by Ofgem found that the “big six” had adjusted their prices when oil prices go up more quickly than they reduced them when oil prices go down.

Mike O’Connor CBE, chief executive at watchdog Consumer Focus, said: “We welcome this explicit statement from Ofgem that the energy market is fundamentally failing consumers and that comprehensive and determined action is necessary to set it on the straight and narrow.

“Companies are now on a very short leash. If they cannot show the will and capacity to change we would expect Ofgem to refer aspects of the markets to the Competition Commission.”

Other measures the regulator has taken include:

• Giving the energy firms eight weeks to engage with Ofgem’s proposals or risk being referred to the Competition Commission
• Introducing greater competition in the electricity market by making the “big six” auction 20% of the electricity they generate, which should help competitors enter the market
• Scottish Power is now under investigation. This joins investigations into how British Gas, EDF Energy and Npower handle customer complaints. There are also on-going investigations into mis-selling by EDF Energy, Npower, Scottish Power and Scottish & Southern Energy.