Ofgem investigation should help create a fairer playing field

Last week, Ofgem hastily announced that they are consulting on plans to refer the energy market to the Competition Markets Authority.

The investigation, which is slated to take at least 18 months, will look at increasing competition in the marketplace by removing the barriers to entry of smaller suppliers and encouraging more switching from consumers, thus driving down prices. Our most recent research showed that almost a third (31%) of retailers had experienced above inflation increases in their energy costs, so anything that reduces the cost of energy for a store is much needed.

[pull_quote_right]The culture of not adhering to voluntary standard of conduct in favour of a perceived price benefit cannot continue[/pull_quote_right]

In the small business market, where there is more prevalence of smaller suppliers than just the ‘big six’, choosing a supplier has often been a trade-off between price and standards. A retailer may get a better unit rate with a certain supplier, but they run the risk of their contract being rolled over and a backdated bill appearing on the doorstop for up to six years’ worth of incorrect meter readings (which are often the fault of the person employed by the supplier to go and read the meter).

The culture of not adhering to voluntary standards of conduct in favour of a perceived price benefit cannot continue. All suppliers should be treating their customers fairly, whether they are the biggest or smallest player in the market.

At this stage, the proposed investigation does not encompass the actions that have been taken as part of the Retail Market Review. This means that key issues like backbilling, rollover contracts and the behaviour of brokers will not feature.

While Ofgem have confirmed to us that work in these areas will continue, it is essential that they do not get lost in the shuffle and we will be working hard to ensure that all suppliers are providing their customers with fair, honest and transparent contract terms that are already well overdue.


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