Energy News

Ofgem's tariff plans must go further, says Which?

Wednesday 26 October, 2011

By Martin Fagan

Watchdog says regulator’s plans to simplify tariffs don’t go far enough and urges energy consumers to take action.

As energy regulator Ofgem begins work on its energy tariff consultation, there’s a danger any reforms will be too weak to have any effect, Which? has said.

Although Ofgem has the chance to reform energy tariffs as part of its retail market review this year, Which? said the regulator’s plans for reform still leaves the door open for energy suppliers to continue to confuse customers with complex tariff structures.

Which? is pressing the regulator to force companies to adopt a simple tariff system and is urging UK consumers to put pressure on the regulator to stamp out confusing practices by taking part in a mass emailing campaign.

Ofgem's current plans allow for the simple tariff format, but only on standard tariffs - usually the most expensive tariff offered by a supplier. This means people who want a better deal will still have to wade through numerous other complex deals in order to get low-cost energy.

Last month, Which? asked 36 people - including a solicitor, an engineer and an accountant - to work out their domestic energy bill using nothing but information from the supplier's website. Just one - a company director - could do it.

“What Ofgem is suggesting is an important step in the right direction,” said Richard Lloyd, executive director of Which?, “but it does not go far enough to solve the problems that consumers face with confusing tariffs.”

Which? has called for all energy companies to adopt a simple tariff that will make it easier to compare different energy company costs.

The tariff would include a daily standing charge covering just the cost of keeping households connected to the network - this charge would be set by Ofgem - and a simple unit price for any energy units consumers use, which includes any discounts they're entitled to.

To ensure Ofgem doesn’t dodge the pressing need to simplify energy tariffs, Which? Is urging consumers to email Ofgem’s chief executive Alistair Buchanan and ask him to tackle tariffs.