Ofgem unveils plans on bill transparency

Ofgem wants firms to clearly state their cheapest tariff on customers’ bills. It also wants suppliers to offer other “vulnerable” customers – the elderly and those on low-income – and those who haven’t switched tariffs “for some time” a personalised estimate on the cheapest tariff available in the market and not just their own offers.

The proposals come just days after the Prime Minister announced plans to force suppliers to switch all customers to the lowest available tariff. The move came as a surprise to the industry, which is not thought to have been consulted, and energy minister John Hayes, who said yesterday (18 October) the government was only considering the change.

Elsewhere, Ofgem wants suppliers to limit the number of core tariffs to four and ensure all tariffs are expressed as a standing charge and single unit price. It also calls for a ban on “complex” multi-tier tariffs.

Alistair Buchanan, chief executive of Ofgem, says: “Our plans will put an end to consumers being confused by complex tariffs and will usher in a simpler, clearer, fairer and more competitive energy market for all consumers.

“We have spoken to thousands of consumers who have helped us shape this package through a period of extensive consumer research, and are very grateful for their input.”

He welcomed the progress made by some of the big six suppliers – replacing complex discounts with fixed value discounts and stopping door step step selling, were two examples offered – but called on them to go further.

He adds: “I am glad to say suppliers have already responded with some initiatives, but these don’t go far enough. Ofgem is determined to press forward with proposals to deliver for consumers the most far-reaching shakeup of the retail energy market since competition was introduced.”

Ofgem will consult with the industry and customers on the proposals but plans to implement many of the measures by summer 2013.