Ofgem tells energy suppliers to simplify tariffs

21st Mar 2011 09:46

UK energy companies will be referred to the Competition Commission (CC) this year unless they make their bewildering array of tariffs easier to understand.Industry regulator Ofgem says customers are being "bamboozled" by a complex system of tariffs that's risen from 180 to over 300 since 2008."That is why we are planning to sweep away this complexity so suppliers' prices are fully exposed to allow easy price comparisons," Ofgem boss Alistair Buchanan said Monday.Greater competition should also be good for consumers, thinks the regulator. The "big six" will have to auction up to 20% of their electricity generation output. Ofgem found that a mixture of tariff complexity, poor supplier behaviour, and lack of transparency was stifling competition. They're also guilty of raising prices quicker than they dropped them when costs fell.They've been given eight weeks to "engage constructively with Ofgem's proposals", otherwise it's off to the CC."Energy companies have failed to play it straight with consumers and so Ofgem is proposing to break the stranglehold the Big Six have over the electricity market," Buchanan said. "This would increase price transparency and make it easier for new players to enter the retail market.Scottish Power also faces an investigation in addition to an ongoing investigation into British Gas, French firm EDF Energy and Npower.Investigations into misselling by EDF Energy, Npower, Scottish Power, and Scottish and Southern Energy continue.