Energy firms face bad week as watchdogs bite

A bad week for energy firms all round as they face regulatory action.

First, industry watchdog Ofgem has told firms that they need to give at least 30 days' notice of any price increase, allowing customers time to transfer to another provider before the new, higher tariff comes into play. It currently takes about six weeks to switch supplier. Also, customers should receive an annual breakdown of how much their energy usage is costing them. Energy firms can block Ofgem's move but the regulator has indicated that if they do so it will refer the matter to the Competition Commission.

Meanwhile, nPower has agreed to refund £63m to customers after failing to properly inform them of a price increase. The payout, averaging £35 per customer affected by the mistake, made in 2007, is the biggest in British energy-sector history; nPower decided to pay following long talks with Consumer Focus. The consumer watchdog became involved after an Ofgem inquiry highlighted nPower's oversight and limited compensation was ordered. But Consumer Focus felt that the compensation was too small and pressed nPower to do more.

Mike O'Conner, the chief executive of Consumer Focus, said: "A huge amount of work and collaboration has resulted in the right thing being done by nPower for its customers, and we welcome this."