Ofgem's plans to simplify the energy market do not go far enoughWhich? wants a single unit price for energy

21 February 2013

Energy bill and lightbulb

The energy regulator Ofgem has announced more details of its Retail Market Review, aiming for a simpler market for consumers. Which? is calling for cheaper and simpler energy deals for consumers, and for more to be done to improve competition and switching.

Ofgem has announced a timeframe for implementation of its Retail Market Review (RMR), with some reforms planned to come into effect as early as summer 2013. Proposals from the RMR include limiting the number of tariffs that suppliers can offer and protecting customers on fixed-term tariffs.

Moving towards a simpler energy market

The RMR would move the energy industry closer to being fair and competitive, but more must be done to protect consumers from rising energy bills.

Which? executive director, Richard Lloyd, said: 'In a week when the regulator has warned of rising bills for years to come, this is a welcome step towards a simpler energy market that is better for consumers. But more must be done to keep costs under control for hard-pressed households who already say spiralling energy prices are their top financial concern.'

Alistair Buchanan, Ofgem chief executive, said: 'We are now counting down to the most radical shake-up of the energy retail market since competition began. We know suppliers are serious about wanting to restore consumer trust and they need to grasp this golden opportunity to change their behaviour and get behind Ofgem's reforms so consumers get the simpler, clearer and fairer energy market they deserve.'

Radical solutions are needed

Which? wants to see more radical solutions to deliver a fairer deal for consumers.

Mr Lloyd said: 'These moves will help people to get a better deal from their existing supplier but do not go far enough to increase competition and keep prices in check. Switching looks set to remain low as people will still struggle to easily spot the cheapest deal on the market, so the government must go further and require all suppliers to use a single unit price.'

The introduction of a single unit price would allow energy prices and new deals to be easily compared at a glance – just like they are on petrol forecourt displays – allowing people to find the best deal with ease.

Changes to improve the switching process are essential, including cutting the time it takes to switch, to make it quicker and easier for consumers to move to a better energy deal.

Energy companies must also make all tariffs available across all payment methods.

If the outcome for consumers has not improved by 2015, Which? wants the government to take a further step and guarantee a fair price for people that are put on the default tariff.

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