The energy regulator Ofgem should impose fines or price caps on electricity suppliers if they are found guilty of failing to pass on wholesale price reductions to domestic consumers, an influential committee of MPs urges today.
The Commons Public Accounts Committee says domestic customers have had a "very poor deal" since the new electricity trading arrangements, or Neta, were introduced in 2001. Wholesale prices have fallen by 40 per cent since 1998 but household bills have only come down by between 1 and 3 per cent while Neta has been in operation.
Edward Leigh, the Conservative chairman of the PAC, said Ofgem should investigate whether suppliers were acting in an anti-competitive way by failing to pass on price reductions. He also called for a renewed campaign to raise customer awareness of the savings that could be made by switching supplier. Since the market was opened up in the late 1990s only 40 per cent of customers have changed.
"Customer loyalty is penalised and, worst of all, potentially vulnerable groups including the elderly are missing out most," said Mr Leigh. "Ofgem cannot be sure that suppliers are not lining their own pockets at consumers' expense." Ofgem said those who switched could save up to £122 a year on the average bill.
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