Energy tariff reforms should 'simplify market', says Ofgem

Watchdog says changes should help rebuild consumer trust

Reforms to energy tariffs should help create a simpler and clearer market and help rebuild consumer trust, regulator Ofgem has said.

Confusing and complex tariffs will be simplified and suppliers will be limited to four core tariffs per customer for both gas and electricity. Discounts to energy tariffs will also be made easier to understand.

Further changes will be introduced from April, when suppliers will have to inform consumers which tariff is cheapest for them.

A Tariff Comparison Rate will also be introduced, which will allow customers to easily compare tariff rates, and bills and quotes will include a "personal projection", which will forecast what a customer will pay based on their usage or a best estimate.

Customers will also be notified of price increases, spelled out in pounds and pence.

Ofgem chief executive Andrew Wright told the BBC he hopes the changes will ultimately drive down prices.

He said: "Profits are not an entitlement, they should be earned by companies competing keenly to offer consumers the lowest prices and the best service.

"Now it is up to suppliers to build on our reforms to restore consumer confidence in the energy market.

"There are good signs that they are taking up this challenge."

Mike O'Connor, chief executive of consumer representation organisation Consumer Futures, welcomed the announcement.

He said: "Consumers need a market they can trust and this reform package brings that closer. We have allowed what should be a market for an essentially simple service to become a byword for complexity and confusion and sometimes very dubious practices."

Mr O'Connor said it would be naive to assume the reforms would solve problems in the energy market, and proposed a review to assess whether the structure of the market fails consumers.

He also called for further programmes of energy efficiency to cut consumer bills in the long term, and a simplification of consumer choice and more advice.

Richard Lloyd, executive director of consumer rights organisation Which?, said the reforms were a step in the right direction but did not go far enough to boost competition and help consumers find the cheapest deals.

He said: "This is why the Government should intervene with more radical measures including simpler pricing, greater transparency and scrutiny of the cost of energy policies, and the separation of domestic supply from generation businesses.

"More must be done to keep prices in check and give consumers confidence that the price they pay for their energy is fair."

PA

Suggested Topics
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Installation Manager

£35000 Per Annum: The Green Recruitment Company: The Green Recruitment Company...

Scrum Master - Southampton, Hampshire - Excellent Package

£40000 - £60000 per annum + Excellent benefits: Deerfoot IT Resources Limited:...

Senior Scrum Master - Hampshire - £47k

£47000 per annum + Excellent benefits: Deerfoot IT Resources Limited: Key skil...

KS1 Teacher

£110 - £120 per annum + TBA: Randstad Education Reading: KS1 Teacher needed fo...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice