Ofgem publishes plans for a simpler, clearer and fairer energy market

Published:  22 October, 2012

Ofgem is proposing plans to improve the competitiveness of the household energy market and make energy tariffs simpler, clearer and fairer.

The plans aim to tackle the problems of tariff complexity, poor supplier behaviour and lack of transparency identified in its review of the retail market.

The proposals were announced last week after David Cameron said he would introduce legislation to force energy companies to give customers the cheapest possible deal.

The energy regulator is following feedback from consumers, proposing simplified tariff structures, limiting the number of core tariffs each supplier can offer to four, and ensuring all tariffs are expressed as a standing charge and single unit price.

Ofgem is also proposing to make suppliers tell customers about the cheapest tariff they have on offer. Additionally, it intends to work with suppliers to trial providing vulnerable consumers and those who haven’t switched for a long time with information about the cheapest tariff for them across the whole market.

Chief executive of Ofgem, Alistair Buchanan, said: “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.

“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 shake-up of the retail energy market since competition was introduced.”

However, Downing Street has said that while the plans outlined by Ofgem are welcome, they do not go far enough. No 10 insisted it will press ahead with the possible legislation to make energy companies automatically offer their best deal, saying it would complement Ofgem's changes.

"It is really the same agenda. We have been working with them for some time on this and will continue to work with them. As the prime minister said, we will use forthcoming legislation to ensure that people get the lowest tariffs," said a spokesperson.