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Government backs Ofgem’s energy reforms

The Government has backed Ofgem’s plans to simplify the energy market and introduce fines for practices such as contract rollover.

Prime Minister David Cameron said:

“The package announced today is a huge step towards energy bills that are more fair for everyone. This is about putting people before profits.

“Our aim is that consumers will get the best possible energy tariff – no tricks, no loopholes – and we will use the powers we gained in the Energy Bill earlier this month to make sure this happens.”

Ed Davey, the Secretary of State for Energy and Climate Change added:

“These reforms are absolutely vital and we want Ofgem to press ahead with implementing them as soon as possible. We know people are feeling the pinch, and want to help consumers with their energy bills and ease the squeeze on living standards.”

Ofgem’s reforms will make energy suppliers:

  • Offer no more than four core tariffs for each fuel type (gas and electricity)
  • Present clearer bills showing the cheapest tariffs
  • Treat consumers more fairly or risk Ofgem fines.

Some of the changes are due to be implemented as early as summer 2013 and Ofgem has said it will publish its proposed reforms for businesses before Easter.

We hope this will include outlawing contract rollovers for business customers.

This would come as a relief to many businesses, as almost a third say that their energy contract has been rolled over at some point, according to our Business Energy Barometer survey. As a result, customers could be stuck paying electricity prices that are 61% higher than the market rate for 12 months.

Our CEO is working with the government and a cross industry group to bring this about, whether Ofgem will act in advance of this remains to be seen.


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