Ofgem’s reforms ‘fail’ to help consumers pick best energy deal

Ofgem’s reforms published today “will fail” to help consumers pick out the best energy deal in the market. That’s according to consumer group Which? in response to the energy regulator’s […]

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By Priyanka Shrestha

Ofgem’s reforms published today “will fail” to help consumers pick out the best energy deal in the market.

That’s according to consumer group Which? in response to the energy regulator’s detailed new rules for a simpler and clearer market for consumers.

It made the comment following its recent research which revealed only three in ten people could identify the cheapest deal from a range of tariffs using Ofgem’s comparison guide. Which? claims Ofgem’s proposals for suppliers to offer four “core” tariffs per fuel type is “fundamentally flawed” and is calling for a single unit rate in the style of a petrol station display to make it simpler.

Which? Executive Director Richard Lloyd said: “While these new rules will help make the market simpler and fairer it’s hugely disappointing to see the regulator sticking to its fundamentally flawed idea of how energy prices should be presented. This will fail to help people find the best deal easily and could even mislead millions into paying over the odds for their energy.

“Energy prices are the biggest worry for consumers and our research shows overwhelmingly that people find it easier to spot the cheapest deal for them when prices are presented clearly, simply and consistently – just like on the petrol station forecourt. As Ofgem continues to plough ahead, ignoring what works for consumers, we call on the Prime Minister to intervene again and make good his promise to help hard-pressed households with their energy costs.”

The trade association for the UK energy industry, however, welcomed the new proposals.

Energy UK said: “Energy suppliers have already pressed ahead with providing customers with simpler, clearer tariffs. Our members have dramatically reduced the number of tariffs, simplified structures and pledged to help all customers move to the deal that suits them best.

“The new rules contain a lot of detail and have only just been finalised but the industry is committed to implementing changes as quickly as we can. These are major changes to the market. The reforms need to be allowed to bed in, with a period of stability for consumers. The impact should also be monitored closely so we can learn for the future.”

Consumer Futures also welcomed the announcement but said both Ofgem and energy companies would need to work on it.

Adam Scorer, Director of Policy and External Affairs said: “It would be naive to assume that this will sort out the energy market once and for all. The market needs to earn consumer confidence. Consumers are not just going to wake up one sunny morning and decide that they trust and want to engage with the market. There are also areas where Ofgem needs to go further, which include making it much easier for customers to switch supplier.

“Moreover Ofgem will need to take this commitment to reform further and respond to the new challenges when smart meters, time of use tariffs and energy services provide new opportunities for energy companies to win or lose consumer trust.”