Consumer groups are calling for “more radical” changes to the wholesale energy market amid fears energy companies will try to “filibuster” their way out of new rules.
Yesterday the regulator Ofgem revealed its final plans to break the “stranglehold” of the Big Six energy suppliers and give smaller ones a better chance.
They include forcing suppliers to publish how much they have paid for wholesale energy as many as two years in advance. Many suppliers buy electricity on the forwards market to guarantee they have power for customers.
In a statement Ofgem said it believes “clear forward prices combined with more trading in wholesale power will produce trusted reference prices”.
But despite Energy Secretary Ed Davey’s stern warning to suppliers to get onside as quickly as possible, consumer champion Consumer Futures is worried they may try to throw a spanner in the works.
Richard Hall, Head of Energy Regulation at Consumer Futures, formerly Consumer Focus said: “There is a need for all players to cease filibustering and finally get this problem solved. We remain anxious about the potential for further delay. Liquidity has been a protracted problem.”
He added: “We have found smaller players complaining about market access since 2003, it was first acknowledged as a problem by the regulator in 2005, and Ofgem has been working to tackle it “urgently” – its words – since 2008.”
Richard Lloyd, Which? executive director said: “Currently wholesale energy prices make up more than half of the costs of energy bills… We want Ofgem and the Government to conduct a more fundamental review into whether the wholesale energy markets are fit for purpose.
He went on: “This should look at whether the structure and dominance of the largest companies is hampering competition in these markets and undermining fair prices for consumers.”
Others were more buoyant and seemed hopeful the move will be enough to bring transparency.
Ann Robinson, Director of Consumer Policy at uSwitch.com said forward pricing of energy “has been so opaque” that the move is “shot in the arm” for the competitive market.