Ofgem orders energy companies to cut bills
Tuesday 24 March 2009
Energy bills are set to fall for up to 10 million households after Ofgem demanded the Big Six suppliers end "unjustified pricing" for electricity and gas. The regulator said yesterday that the energy industry would have to justify all above-average charges on the basis of their costs, which should lower prices for prepayment and electricity customers.
Energy companies will also be required to send an annual statement to all 33 million UK customers setting out their tariff and annual energy use. Firms will also have to provide a written quotation of prices to households approached in person in a move aimed at ending "rogue" doorstep selling.
Ofcom has often been criticised for being too gentle with the Big Six power companies – nPower, E.On, EDF, British Gas, Scottish and Southern, and Scottish Power – over claims they exploited millions of customers. Last October, however, Ofgem said it believed the market was not working well for all customers. In particular it reported overcharging of 3.5 million electricity customers with former incumbent operators and some of the 5.4 million people with pre-payment meters.
Setting out a consultation yesterday, Ofgem said that in future all companies would be able to charge no more than £85 extra for pre-payment customers over the direct debit rate, when the current difference is £102. Companies will also have to justify – and more likely reduce – charging up to 12 per cent more in former monopoly areas, lopping up to £50 off an average bill.
"This is an emphatic move to clear the decks of obstacles that prevent consumers from getting access to the best offers," said Ofgem's chief executive, Alistair Buchanan.
The Energy Retail Association said that since October energy suppliers had cut tariffs on prepayment and electricity-only tariffs by £300m.
Its chief executive, Garry Felgate, said: "We are keen to participate in the consultations announced today and look forward to hearing the outcomes later this year."
- 1 I've been called an abusive and dangerous parent, when all I did was listen to my transgender child
- 2 Smartphones are making children borderline autistic, says psychiatrist
- 3 Why this father didn’t hide his daughter’s heroin overdose in her obituary
- 4 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 5 Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
Smartphones are making children borderline autistic, says psychiatrist
Nepal earthquake: More than 1,100 killed across four countries and in Mount Everest avalanche
Nepal earthquake: The race is on to help thousands trapped under rubble around Kathmandu, while remote villages face a long wait for help
Royal baby: Live updates as superbug closes ward at St Mary's Hospital where Duchess of Cambridge is due to give birth
Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
Rupert Murdoch berated Sun journalists for not doing enough to attack Ed Miliband and stop him winning the general election
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...