Ofgem has announced that there will be new rules banning energy companies from charging unjustified prices.
From now on energy companies will have to reflect the costs for different payment options like pre-payment cards.
Ofgem has been looking into how well the energy market is working, if at all, and has been investigating since February 2008.
Ofgem found that the market was working well and there were no signs of collusion in amongst the
big six of price fixing.
However it did have concerns over the difference in pricing for people that pay their bills in certain ways and in deals for customers with no gas supply.
12% of customers pay by
pre-payment meter but around 38% of those are in social housing.
To service a pre-payment meter will cost £85 where as customers have been getting charged around £125 per year for that service, the new rule will state that no customer should more than the cost of the service.
Under the proposed rules:
• Different payment methods will have to reflect the cost to the supplier of offering those methods
• Energy companies must provide an annual statement to customers providing details such as the tariff, consumption and a reminder of the customer's right to switch
• An at-a-glance price scorecard on bills to make it easier for consumers to switch
• Small businesses to be given clear contracts with no automatic rollover when the agreement ended
• Written quotes on doorstep sales.
This is an emphatic move by Ofgem and hopefully will lead the way in getting cheap,
green electricity to all energy customers in the UK at affordable prices.
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