Called on by the Competition Markets Authority (CMA) to cap some of the most expensive retail power tariffs in Britain, energy regulator Ofgem has now committed to implementing measures that will improve competition. One utility boss criticised, however, that “too much onus” is being put on consumers.
A price cap on pre-pay metres will be implemented with the aim of helping the "most vulnerable and least likely to switch" and will save them around £75 a year from next April, Ofgem stated. Over 4 million British households have a pre-payment metre that requires upfront payment at often more expensive tariffs for their electricity and gas consumption.
CEO Dermont Nolan underlined the regulator’s objective to working closely with energy supplier to help customers get a better deal, e.g. through sending out reminders on customer bills to encourage them to compare tariffs.
Yet, First Utility's managing director Ed Kamm told the BBC such plans risk to preserve a 'tale of two markets' as they were “helping those who already shop around and doing little to properly help those who are continuing to pay much more than they need to or should.”
The CMA had urged Ofgem to adopt certain measures, such as giving rival suppliers access to an updated database that would allow them to contact customers that have been on the most expensive tariffs for more than three years. The competition watchdog also wants Ofgem to monitor utilities’ compliance with the price cap from April 2017.
CMA probe costs taxpayer £5m
A freedom of information request, launched by not-for-profit energy provider Ebico, revealed in late July that the CMA probe has cost £5 million of tax payers’ money and that energy consumers will see some of the costs passed on their energy bills. Phil Levermore, Ebrico CEO called the CMA probe “a complete waste of time and public money.”
Several independent suppliers, including First Utility, criticised that “the CMA has missed the mark” as meaningful proposals were watered down amid pressure from the Big Six; and as Ebrico sees it “the energy market has simply moved on in the time it’s taken to publish the recommendations.”