Ofgem announce plans for price-hike sea-change
Energy companies may be forced to give consumers 30 days notice before increasing energy costs, if new proposals by Ofgem are approved.
Announced today (September 30) the proposal is amongst a raft of reforms the energy watchdog wants implemented to ensure consumers' interests remain at the heart of the energy market.
Currently, the shoe is very much on the other foot, with energy companies only required to inform customers of a price hike 65 days after its introduction.
Other measures Ofgem hope to see introduced include the removal of what it describes as the "unjustified price differences" between energy suppliers; a move which Ofgem claims could benefit affected customers to the tune of £500million.
Further reforms would require more information on bills, tougher door-step selling regulations, rules to make it easier for consumers in the red to switch supplier, and a requirement for companies to publish financial information on their supply businesses.
Speaking of the reforms, Ofgem's Andrew Wright said: "A month's notice of price increases, along with annual energy statements and better information on bills, will empower consumers by giving them the facts about how much their energy costs.
"This information makes it easier to shop around for a better energy deal and to evaluate the benefits energy efficiency measures can deliver."
However, despite the watchdog's sway, all proposals remain the subject of a consultation, meaning they could still be blocked by a majority objection. Were that to happen, Ofgem would have to take the issue to the Competition Commission before any further progress could be made.
But Mr Knight made clear that Ofgem are prepared for a struggle, adding: "Companies should be under no illusions: we will continue to keep the effectiveness of the energy market under review and will not hesitate to bring forward further measures to protect consumers if the evidence shows them to be necessary. We intend to make sure that our current reforms stick."
If successful, Ofgem's proposals could come into effect by as early as January 2011.