Ofgem Propose an ‘Unfair’ Energy bill ban

Energy companies will be banned from charging ‘unjustified’ prices under rules proposed by UK regulator Ofgem.


Ofgem started its investigations into the state of the energy markets back in February 2008.


In its initial findings in October, Ofgem said there was no evidence of collision between the ‘big six’ suppliers in setting prices and the market was ‘working well’ for most consumers.


But it raised concerns over the difference in prices for those paying in different ways and for those with no gas supply.


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 to clear the decks of obstacles that prevent consumers from getting access to the best offers," said chief executive Alistair Buchanan.


The new conditions would give Ofgem the power to fine companies that could not prove price differences were justified.


The regulator will publish a draft of the new licensing condition next month and consult with energy suppliers, with the aim to implement them by the autumn. The new rule would be in place for three years before being reviewed.


If they cannot agree, Ofgem said it retains the right to refer the matter to the Competition Commission.