Energy watchdog to halt poor price deals

Published 23rd Mar 2009

Ofgem, the energy regulator, today unveiled a package of proposals to ensure that power suppliers do not discriminate against certain customers by offering them bad deals with "unjustified price differences".

An earlier investigation had found "flaws" in the retail market that meant some consumers were given bad deals.

The regulator is planning to ban "unjustified price differences", where some classes of customers are treated worse than others, and to bring in measures to increase transparency in the market.

Suppliers will have to provide an annual statement telling consumers how much energy they have used and reminding them of their right to switch to another provider.

Tariffs will have to be made simpler, to allow customers to compare different deals on offer more easily.

Ofgem is also planning a crackdown on high pressure doorstep sales, which will have to be followed up by a written statement. For customers who use pre-payment meters, suppliers will have to prove that the offer made on the doorstep is better than their existing deal.

There have been concerns that such customers, who are often among the poorer members of society, have been given worse deals by the energy companies. A ban on "unjustified pricing" would ensure they were not discriminated against.

Alistair Buchanan, chief executive of Ofgem, said this morning: "Our undue discrimination rule will address the symptoms of flaws in the market, while our retail market measures will treat the causes." He added: "All consumers will be given greater power in the market."

The regulator will now consult with energy suppliers on the implementation of the proposed measures.

Ofgem launched an investigation in February last year into concerns that companies may be reducing choice and competition by imposing similar price rises on consumers around the same time as each other.

In October, it said it would look into banning unfair price differences, but said the market was working well for most people and that it had failed to find any evidence of an energy supply market cartel.

All six major UK energy suppliers - Centrica Plc, RWE AG, E.ON AG, EDF Energy, Scottish & Southern Energy and Iberdrola’s Scottish Power raised their prices last year, although some have reduced them in 2009.

Source: ' Times '

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