CMA seeks views on measures to help microbusinesses

The competition watchdog is inviting views on measures to help microbusinesses and households on the most expensive tariffs find better deals. It follows a two-year investigation into the energy market, […]

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By Priyanka Shrestha

The competition watchdog is inviting views on measures to help microbusinesses and households on the most expensive tariffs find better deals.

It follows a two-year investigation into the energy market, which revealed microbusinesses have been paying around £180 million a year more for gas and electricity than they would in a competitive market.

The Competition and Markets Authority (CMA) also found around 45% of them are stuck on expensive ‘default’ tariffs.

At present, when some microbusinesses come to the end of an agreement with a supplier, they can be transferred to a more expensive rollover contract.

The CMA is consulting on a measure that will stop suppliers using high exit fees to lock microbusinesses in these contracts from next year. Suppliers would be obliged to publish their prices so customers can know what they are paying for their energy and the alternatives they have.

The investigation also found 70% of domestic customers could save as much as £300 a year by switching to cheaper deals.

The watchdog is therefore also consulting on one of the measures, which will require suppliers to provide Ofgem with information about both domestic and microbusiness customers, including their energy usage, who have been on a default tariff for more than three years. They would be among those paying the highest prices for their energy.

The regulator would then make the database available to competing suppliers so they can offer cheaper deals via post directly to customers – who will be able to opt out whenever they want.

However Ofgem recently said suppliers aren’t showing as much excitement about engaging with the regulator on the database or on carrying out random control trials to get better prompts to consumers to engage.

Another consultation on making suppliers allow the 700,000 – mainly Scottish – households on restricted meters switch tariffs without their meters being replaced has also been launched. Some customers with these meters are expected to save as much as £150 by switching to a cheaper tariff.

Responses on the draft orders are invited by 18th November to [email protected] and [email protected]

Last week the CMA also launched a consultation on proposals to help prepayment meter customers.

Energy bills and market trends will be part of the debate at Energy Live 2016 on November 3rd. Book your place now so you don’t miss out – there are limited free tickets for energy end users and university students.