Ofgem announces new rules affecting 'Big Six'

26th Feb 2014 09:13

Energy regulator Ofgem has unveiled new rules that will mean the "big six" energy suppliers will face tougher scrutiny to ensure a "simpler, clearer, fairer" market. Under the new enforcements, which come into play at the end of March, the largest six suppliers in the UK will have to trade fairly with independent suppliers in the wholesale market, or face financial penalties. They will also have to publish the price at which they will trade wholesale power up to two years in advance, enabling independent suppliers and generators to trade and compete effectively.Nearly two million customers in the UK are with independent suppliers. Ofgem's Chief Executive, Andrew Wright said: "Our rules for a simpler, clearer, fairer energy market are coming into force, meaning that it is getting easier for consumers to pick out the best deals. Now we are also breaking down barriers to competition for new entrant suppliers. These reforms give independent suppliers, generators and new entrants to the market, both the visibility of prices and opportunities to trade that they need to compete with the largest energy suppliers."We also want to ensure that information on revenues, costs and profits of the largest energy suppliers is as clear as possible for consumers [...] Both of these reforms will help ensure competition bears down as effectively as possible on prices."Under the new rules, the "big six" cannot refuse any reasonable requests by independent suppliers to buy electricity and will have to meet these within given deadlines. In addition, they must ensure that they sell electricity to independent suppliers at the market rate, offering a full range of products in forward markets to help independent suppliers hedge their costs.Ofgem also said it was reviewing the way annual statements are submitted. They must now be fully and independently audited to ensure the methods used are appropriate. The regulator said it was "committed to further improving transparency where possible". Secretary of State for Energy and Climate Change, Edward Davey, commented that the reforms were a "significant and welcome toughening up of competition in electricity markets". NR