Residential and small business consumers in Britain to get fairer energy market


London, England — (METERING.COM) — October 30, 2012 – Residential and small business consumers in Britain are set to benefit from changes proposed by energy regulator Ofgem to make the market clearer and fairer.

The proposed changes, forming part of Ofgem’s retail market review, are in two consultations, which the regulator launched last week.

For residential consumers, the key proposals up for consultation are to:

  • Limit each supplier to four tariffs per fuel, per meter and per payment type
  • Put an end to complicated multi-tier tariffs, requiring all tariffs to be set out in a simple standing charge and unit rate structure
  • Require suppliers to give consumers personalized information on their bill of the estimated savings they could make if they switch to their supplier’s cheapest deal
  • Introduce a tariff comparison rate, i.e. a ‘common currency’ to allow customers to compare tariffs across the market
  • Require suppliers to give all customers a new, improved annual statement with the personalized information a consumer needs to engage in the market, and to provide other ‘calls to action’ on bills and in the letter notifying consumers of price increases
  • Introduce new license conditions to require suppliers to treat their customers fairly and to embed this principle throughout their business.

For small businesses the key proposals up for consultation are to:

  • Extend the protections currently given only to micro businesses to small businesses (more than 150,000 additional businesses)
  • Require that suppliers provide the contract end date on the bills of small businesses and the date by which they need to send in a termination notice
  • Put in place binding standards of conduct for suppliers to adhere to when billing, contracting and switching small businesses.

Ofgem also proposes to take the lead in developing options for a single code of conduct for third party intermediaries in the non-domestic sector, i.e. energy brokers or agents who facilitate energy deals between businesses and energy suppliers.

The regulator will also launch a wider review to deliver a regulatory framework for third party intermediaries (including those that operate in the domestic market) that is fit for purpose in light of market developments and that supports consumer engagement and protection.

“Our plans will put an end to consumers being confused by complex tariffs and will usher in a simpler, clearer, fairer and more competitive energy market for all consumers,” commented Ofgem chief executive Alistair Buchanan on the proposals for the residential market.

The two consultations close on December 21, 2012. The aim is for the reforms in both sectors to come into legal effect in summer 2013.