The new Energy and Climate Change Secretary has welcomed today’s action by regulator Ofgem in directing a £4.5m ‘fine’ from power supplier EDF back toward the energy consumer. EDF were found guilty of breaches to its sales processes.
Ed Davey said: “This is a welcome example of the independent regulator taking real action to protect consumers and make sure help is provided to those who need it most.”
The regulator came under fire last year for being too weak when facing the Big Six power suppliers. Despite promising to get tough, many were underwhelmed by the regulator’s responses to complex and expensive energy tariffs.
As a result, many have called for Ofgem’s powers to be increased so they can more closely monitor the power companies.
Audrey Gallacher, Director of Energy at Consumer Focus said such powers were working: “We’ve called for Ofgem to have the power to make sure energy customers benefit from any fines – so it’s good news that this voluntary approach has led to customers’ being compensated ratherthan money returned to the Treasury.”
DECC worked with Ofgem in order to improve competition in the retail market last year. The Energy Secretary said the Government would continue to aid the regulator.
Mr Davey said: “The Government has already strengthened Ofgem’s hand by making it harder for energy companies to block licence changes and introduced tougher rules on the information suppliers have to provide to their customers.
“We are now looking at beefing up Ofgem’s powers further so it can make companies compensate consumers directly in cases like this, rather than having to rely on a voluntary approach.”