Ofgem to ban 'unjustified' prices.

A_fiend_for_life · 23 March 2009 at 9:03AM

Could be welcome unwelcome news for those on prepayment meters:

http://news.bbc.co.uk/1/hi/business/7958525.stm

They will still be able to charge higher but need to be able to justify the higher rate.

ETA: unwelcome - they've updated the article already.

1carminestocky · 23 March 2009 at 9:14AM

Note to energy company CEO's: it's OFGEM, don't forget, rest easy.

A_fiend_for_life · 23 March 2009 at 9:33AM

Indeed

Ofgem also stressed that there was no evidence that suppliers passed on increasing wholesale costs to customers, but then failed to drop prices when costs fell.

from penultimate paragraph.

If thats the case then surely their investigation is premature.

jimexbox · 23 March 2009 at 9:35AM

I would love to work for OFGEM, stress free days lying around in the sun, sipping iced tea wondering when to release the next computer generated press release in between reading a 'self help' book called 'how to grow a pair'.

OFGEM employee's must be the only folk who don't want to win the lottery, you dont need to win it twice.

1carminestocky · 23 March 2009 at 9:49AM

Anyone who reads the npower sculpting thread will be amazed they had the remit to conduct this research as they have stated they can't investigate incidences of overcharging

. This shower of %$^& really do need nuking into orbit and replacing with an organisation that doesn't embarrass the term 'regulator'.

A_fiend_for_life · 23 March 2009 at 10:15AM

So who regulates the overcharging? Competition commission? Overcharging prevents people on marginal incomes moving to another supplier so there should be a case. If investigations into supermarkets are anything to go by it will be just as much a whitewash.

Begs the question how independent regulators are from government.

1carminestocky · 23 March 2009 at 10:26AM

Mr Webb, a former energy and now pensions spokesman for the Liberal Democrats, says: “I am disappointed at the meagre level of compensation. My concern is that Ofgem's findings have not done justice to the losses that people have suffered through the actions of npower.

“However, Ofgem did argue that its powers are limited and that it can look only at certain complaints, such as failure to notify customers of tariff changes, rather than broader issues of overcharging.

http://www.timesonline.co.uk/tol/money/consumer_affairs/article5902979.ece

Premier_2 · 23 March 2009 at 12:42PM

Energy companies will be banned from charging "unjustified" prices under new rules proposed by the regulator Ofgem.

Prices for different payment methods, such as pre-payment meters, will have to reflect costs to the supplier...

Will this affect the ebico business model?

Ebico openly admit that they 'level out' the various costs of the differing payment methods to enable them to charge all their customers the same flat rate.

Will the Ofgem rules outlaw this type of ethical pricing strategy?

Under the proposed rules:
Different payment methods will have to reflect the cost to the supplier of offering those methods

filmnoir · 23 March 2009 at 4:15PM

Premier wrote: »

Will this affect the ebico business model?

Ebico openly admit that they 'level out' the various costs of the differing payment methods to enable them to charge all their customers the same flat rate.

Will the Ofgem rules outlaw this type of ethical pricing strategy?

At the moment all participants within the industry will debate what is needed and consulted with before any ammendments to supplier licenceses made and any modifications put into force.

Majority of the talk is around invoicing and making it clearer for customers in terms of actual tarrif price, a annual invoice detailing the tarrif, no contract roll overs for SME customers among other things.

One of the issues I can't see happening is the big hype over payment methods being justified against costs. Suppliers are very bad at knowing the physicial costs i.e meter reading, meter maintenance etc per physcial supply.

Also suppliers pre empted this last year by reducing pre payment and will end up reducing their old PEX region prices which they were caught out on. Dont expect to see drastic cuts mirroing cost to serve because its a pipe dream at least till the full roll out of smart metering.

Energyman_2 · 23 March 2009 at 7:28PM

Small businesses to be given clear contracts with no automatic rollover when the agreement ended
Written quotes on doorstep sales.

Lets face it - it has to be an improvement! and the two items above with really cut down on complaints.

Automatic rollover is absolutely shocking and I'm amazed energy suppliers have been allowed to get away with it for so long.
Written quotes at the doorstep should help prevent complains about miss-selling and people being signed to higher tariffs.

adprob · 24 March 2009 at 9:18PM

So who decides what is "unjustified". it is a catch all term that means different things to different people.

Quis custodiet ipsos custodes?

Ofgem to ban 'unjustified' prices.

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