Energy reforms on the cards under new Ofgem proposals

Ofgem's new proposals hope to encourage people to switch supplier.
Ofgem's new proposals hope to encourage people to switch supplier.
Share this article
0
Have your say

Ofgem is set to launch its own price comparison site - as well as introducing a safeguard tariff for vulnerable consumers which would protect them from overpaying for their energy - under a raft of new measures proposed by the regulator.

The new ‘Check Your Energy Deal’ online switching service is aimed at customers who have been on poor value standard variable tariffs for three years or more to find cheaper deals.

Ofgem also said it would cap at £150 how much suppliers can charge customers for installing a pre-payment meter under warrant - which can happen in situations when a customers has not paid their energy bill - and ban these charges altogether for the most vulnerable.

Dermot Nolan, chief executive of Ofgem, said: “Protecting vulnerable consumers is a priority for Ofgem. We are committed to ensuring that the more disadvantaged in society are not left behind as we move towards a smarter, more competitive energy market.

“That’s why we are starting new work to protect vulnerable customers, including the option of introducing a safeguard tariff for them.

The proposals would also see the rules changed for price comparison websites to make it easier for people to switch to cheaper deals. Currently, users cannot switch directly to some of the cheapest deals listed and have to visit the supplier’s own website and re-enter their details, but under the new rules, they would be able to switch directly from a price comparison site.

Mr Nolan added: “Suppliers must also do more to get all their consumers, particularly those on poor value standard variable tariffs, a better deal. We are pressing ahead with a raft of reforms to make it even easier for people to switch no matter how they choose to shop around.”

In a separate trial, Ofgem said it is testing whether writing to customers – including people who are vulnerable and not online - about cheaper offers from rivals prompts them to shop around and switch tariff. While the number of switches is at a nine year high, many people have still never or have rarely switched.

Alex Neill, managing director of home products and services for Which?, said: “Millions of hard-pressed customers are overpaying for their energy and suffering due to a lack of competition in the energy market. More help for the most vulnerable customers and steps to make switching easier are welcome, but people will question whether these interventions are enough to deliver an energy market that finally works for all consumers.”

Richard Neudegg, head of regulation at uSwitch.com, said: “It’s absolutely right that Ofgem is proposing targeted help for the most vulnerable households to ensure that those most in need do not get left behind. We want to see practical proposals to help vulnerable customers as soon as possible.”

Earlier this year, prime minister Theresa May promised a cap on energy prices which was estimated to save 17 million customers £100 or more, but the promise did not appear in the Conservative Party’s manifesto.