MSE News: Energy firms ordered to play fair on prices – Ofgem

PennyForThem_2

This is the discussion thread for the following MSE News Story:

"The regulator has threatened Britain's Big Six energy firms with action if they fail to make their pricing less complex ..."

Read the full story:
Energy firms ordered to play fair on prices – Ofgem

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http://www.bbc.co.uk/news/business-12802591

Shouldn't they have looked at their non-competitive practices a couple of years ago?

KimYeovil

http://www.ofgem.gov.uk/pages/moreinformation.aspx?docid=360&refer=media/pressrel

More docs here:
http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?file=RMR_FINAL.pdf&refer=Markets/RetMkts/rmr

They are not coming down hard. Or, at least, as far as I can see, their 'solutions' do little to create more fairness. Nothing is being done to stop rampant unfairness in variable tariffs with leaving penalties - they will be untouched. The standard tariff solution - what will the one price tariff mean structure wise? If it is an Ebico-like flat rate then that means healthy low-users like me will be subsidised by elderly disabled customers through an uncapped standing charge. If a two-tier tariff with all suppliers having the same number of tier 1 units then fair enough. If a daily standing charge tariff then very poor people are now going to have to subsidise those who can afford to switch on the heating.

I'm too unknowledgeable to know what the effect the sell off of 20% of wotsits will be.

Not bumping people on to other penalty-carrying tariffs at the end of their original one may sound fair enough. I look forward, however, to everyone screaming about the massive increases in prices and why-wasn't-I-offered-the-cheapest-tariffs.

Most surprising to me is the singling out of Scottish Power - they are the company that has had a very fair standard tariff (until recently) where standard users can receive close to the best prices simply through paying their bills on time. This is a policy that fairness campaigners should be crying out for. Haven't tracked down the details of the complaint about them, yet.

DirectDebacle

Link to Ofgem current investigations. S.P. investigation not there yet. Probably be a day or two before they update.

http://www.ofgem.gov.uk/About%20us/enforcement/Investigations/CurrentInvest/Pages/CurrentInvstgtns.aspx

Reaper

I do strongly feel something needs to be done about simplifying tariffs so they all use the same basis. It is daft when consumers have no choice but to use a comparison web site to find the best deal, and even then you have to hope the best deal is not sidelined because the web site doesn't get paid by that particular supplier, or the best deal that comes up has hidden catches.

I wonder how those who don't use the internet choose their energy company.

I hope this may be a useful reform, though I doubt very much it will go far enough.

MillicentBystander

Crikey. Are OFGEM on performance enhancing substances? :eek: I would imagine this will turn out to be all talk and no action but it's so unlike OFGEM in its approach - it actually feels like they may have the consumer's interests at heart for a change. But I'm sure the fine detail will say otherwise....

KimYeovil

Never mind fine detail the broad detail hardly seems favourable.

The biggest omission is the complete lack of anything being done for the biggest victims of the market - those who pay their quarterly standard tariff bills on time in cash will continue to be done over and will continue to subsidise everyone else. Outrageous.

KimYeovil

The other main targets of the reforms seems to be the very poor and the frugal - it appears that Ofgem wants to remove a two-tier tariff structure and force everyone to pay a standing charge day-in day-out all year round. It will no longer be possible to save a few pounds every month once the central heating is switched off. If you have insulated your home or wear jumpers or live on a middle floor or are just too poor to use much energy in the first place even when you want to then tough - you will have to pay more.

[Deleted User]

I was just on the One O'Clock News (BBC One, BBC One HD, BBC News Channel) talking about this... again at 6pm and 10pm ;-)

Widelats

I have a learning disability called Dyscalculia, i can't figure out bills or units or whether its too much or too little or what, hopefully it will tell me straight in future.

I don't use much, my gas bill is £89.50 and that has just arrived today, that is for gas through the winter months from October to now.

KimYeovil

Widelats wrote: »

I have a learning disability called Dyscalculia, i can't figure out bills or units or whether its too much or too little or what, hopefully it will tell me straight in future.

To the contrary - I would say it is likely to end up giving people a false sense of confidence and they are more likely to be tricked by what appears superficially to be cheaper.

Cardew

PennyForThem wrote: »

http://www.bbc.co.uk/news/business-12802591

Shouldn't they have looked at their non-competitive practices a couple of years ago?

There is so much hype about Ofgem's 'crackdown' on the companies that people will get the impression that prices will fall drastically and they won't!

You might note in the interview that he said "for the first time since 2010" the companies have overcharged. On another part of that interview(not on that link) he was pressed to state how roughly much customers had been overcharged and he answered(rather sheepishly) £10 a year!!!

The most important issue IMO will be to curtail 'confusion marketing'. Even some of us anoraks have difficulty in keeping up with the ever-changing picture.

I don't think that automatically transferring customers on a fixed/capped price tariff to another tied in tariff is so important - although it is obviously wrong. Most people who have elected for a fixed/capped price tariff will have some idea about tariffs to have switched from a Standard tariff in the first place.

It is the less savvy customers who have remained on the Regional suppliers Standard Electricity tariff and BG Standard tariff, paying both quarterly by cash, that are the victims.

That said if lots of those customers have their charges trimmed, the charges on other tariffs will increase to compensate - Robbing Peter to pay Paul'. The companies are still going to raise their £xbillion in revenue.