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| Ofgem to tackle 'complex and unfair energy bills' | Ofgem to tackle 'complex and unfair energy bills' |
| (2 months later) | |
| Regulator Ofgem has told energy firms they must offer simpler tariffs to help consumers compare prices. | Regulator Ofgem has told energy firms they must offer simpler tariffs to help consumers compare prices. |
| The regulator said that customers were "bamboozled" by a complex system of tariffs, which have increased from 180 to more than 300 since 2008. | The regulator said that customers were "bamboozled" by a complex system of tariffs, which have increased from 180 to more than 300 since 2008. |
| The "big six" suppliers should also face more competition, Ofgem said. | The "big six" suppliers should also face more competition, Ofgem said. |
| It said it would force these firms to auction off up to a fifth of the electricity they generate, making room for new companies. | |
| Ofgem said it had also found evidence that the "big six" energy firms "have adjusted prices in response to rising costs more quickly than they reduced them when costs fell". | Ofgem said it had also found evidence that the "big six" energy firms "have adjusted prices in response to rising costs more quickly than they reduced them when costs fell". |
| Competition in the UK energy market is being stifled through complicated tariffs and a lack of transparency, and energy firms had "failed to play it straight with consumers", it said. | Competition in the UK energy market is being stifled through complicated tariffs and a lack of transparency, and energy firms had "failed to play it straight with consumers", it said. |
| Ofgem launched a review of the energy market after claims were made that suppliers were making excessive profits. | Ofgem launched a review of the energy market after claims were made that suppliers were making excessive profits. |
| Earlier in the year, British Gas said operating profits had risen by 24% in 2010 to £742m. | Earlier in the year, British Gas said operating profits had risen by 24% in 2010 to £742m. |
| In November, Ofgem said that energy supplier's net profit margin per typical customer rose from £65 in September to £90 in November, a 38% rise. | In November, Ofgem said that energy supplier's net profit margin per typical customer rose from £65 in September to £90 in November, a 38% rise. |
| Consumer confidence | Consumer confidence |
| Energy firms could be referred to the Competition Commission if they do not comply with the new system, Ofgem said. | Energy firms could be referred to the Competition Commission if they do not comply with the new system, Ofgem said. |
| "Consumers must have confidence that energy companies are playing fair at a time when they are being asked to foot the £200bn bill to pay for the investment Britain needs to ensure secure and sustainable energy supplies," said chief executive Alistair Buchanan in a statement. | "Consumers must have confidence that energy companies are playing fair at a time when they are being asked to foot the £200bn bill to pay for the investment Britain needs to ensure secure and sustainable energy supplies," said chief executive Alistair Buchanan in a statement. |
| One supplier, Scottish Power, will face an investigation into its pricing regime, Ofgem said. | One supplier, Scottish Power, will face an investigation into its pricing regime, Ofgem said. |
| That investigation is in addition to an ongoing Ofgem investigation into British Gas, EDF Energy and Npower into how they handle consumers' complaints. | That investigation is in addition to an ongoing Ofgem investigation into British Gas, EDF Energy and Npower into how they handle consumers' complaints. |
| Ofgem is also still investigating possible mis-selling by EDF Energy, Npower, Scottish Power, and Scottish and Southern Energy. | Ofgem is also still investigating possible mis-selling by EDF Energy, Npower, Scottish Power, and Scottish and Southern Energy. |
| "In response to customer demand, there is now a wide range of energy products available - such as green tariffs and fixed tariffs - to meet the diverse needs of different customers," said Christine McGourty of the energy industry body Energy UK. | "In response to customer demand, there is now a wide range of energy products available - such as green tariffs and fixed tariffs - to meet the diverse needs of different customers," said Christine McGourty of the energy industry body Energy UK. |
| "If energy companies are not setting out these options clearly enough then this is something that should be addressed." | "If energy companies are not setting out these options clearly enough then this is something that should be addressed." |
| Long-term deals | Long-term deals |
| The regulator also wants to ban automatic rollovers of fixed contracts. | The regulator also wants to ban automatic rollovers of fixed contracts. |
| Some customers pay a set price each month for their energy over the period of a contract, irrespective of price changes for other customers. | Some customers pay a set price each month for their energy over the period of a contract, irrespective of price changes for other customers. |
| Ofgem wants to ban suppliers automatically renewing these deals so customers are not repeatedly tied in to long-term deals. | Ofgem wants to ban suppliers automatically renewing these deals so customers are not repeatedly tied in to long-term deals. |
| A similar ban on automatic rollover contracts for land line telephone lines was proposed by communications regulator Ofcom earlier this month. | A similar ban on automatic rollover contracts for land line telephone lines was proposed by communications regulator Ofcom earlier this month. |
| Instead, customers should default back to the standard tariff, unless they actively choose another fixed-term deal, it said. | Instead, customers should default back to the standard tariff, unless they actively choose another fixed-term deal, it said. |
| Watchdog Consumer Focus welcomed Ofgem's review of the energy market. | Watchdog Consumer Focus welcomed Ofgem's review of the energy market. |
| "Companies are now on a very short leash," said chief executive Mike O'Connor. | "Companies are now on a very short leash," said chief executive Mike O'Connor. |
| "We welcome the explicit statement from Ofgem that the energy market is fundamentally failing consumers and that comprehensive and determined action is necessary to set it on the straight and narrow." | "We welcome the explicit statement from Ofgem that the energy market is fundamentally failing consumers and that comprehensive and determined action is necessary to set it on the straight and narrow." |
| The "big six" energy firms are British Gas, E.On Energy, EDF Energy, Npower, Scottish and Southern Energy and Scottish Power. | The "big six" energy firms are British Gas, E.On Energy, EDF Energy, Npower, Scottish and Southern Energy and Scottish Power. |
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