Government given more power over energy companiesEnergy Act should improve price rise notification

09 April 2010

Utility bill

Smart meters should bring an end to estimated and inaccurate bills.

The government now has the power to stop energy companies delaying telling customers about price rises.

The power is given in the new Energy Act 2010, following campaigning by Which?. It means that the government can set the period within which energy companies must inform customers of changes to their gas or electricity tariff.

Previously, companies could sit on this information for up to three months after the rise had come into force.

Keep ahead of energy price rises and cuts by visiting Which? Switch, where you can find all the latest energy news and compare your current tariff against others on the market.

Triumph for Which? campaiging

Responding to the news, Which? chief executive Peter Vicary-Smith said Which? had long called for action on this issue. In a poll of 7,800 members, 95% said they wanted advance notice of changes to their energy tariff.

Mr Vicary-Smith said: ‘The Energy Act gives the secretary of state the power to ensure energy companies notify customers of price hikes within a set time frame, ending the current tariff limbo where they can be kept in the dark for up to three months.’

You can keep up-to-date on all the issues that Which? is campaigning for, and see details of our current energy bills campaign on the Which? campaigns page.

Will the time limit be cut?

Energy regulator Ofgem is currently consulting on the possibility of changing the time limit within which energy companies must inform customers of price changes.

The deadline for responses to its consultation is 14 May, and it will report its decision after this date. If the government finds Ofgem’s decision unsatisfactory, it can step in and overrule it.

Energy Act 2010

As well as giving the government additional powers, the new Energy Act 2010 will also:

  • change the way that social tariffs work, to make sure energy companies provide adequate support to the fuel poor.
  • make sure Ofgem steps in proactively to protect customers
  • extend the time limit from 12 months to five years within which Ofgem can impose financial penalties on energy suppliers that breach their licence conditions.

Energy companies won’t face price inquiry

Separately, the government yesterday ruled out the possibility of a Competition Commission investigation into the discrepancy between rising household energy bills and falling wholesale costs.

During Commons question time, junior energy minister David Kidney said: ‘I don't think that what's needed at the present time is a referral to the Competition Commission for the whole energy market.

‘This is a time when we need sustained investment in the future of our infrastructure of this country and that would only delay it.’

Lower your gas and electricity bills

You can compare energy prices and switch to a new gas and electricity supplier on Which? Switch. People who switched with us between 1 October and 31 December 2013 are predicted to save an average of £234 a year on their bills.

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