Summary
A report from the Energy and Climate Change Committee highlights that consumers who are now paying more as a result of changing their energy suppliers should be compensated.
'Ofgem's Retail Market Review’ (HC 1046) details that customers may feel pressured into switching gas and electricity suppliers by ruthless sales teams overwhelming them with complex tariffs.
Figures from the Office of Gas & Electricity Markets (Ofgem) suggest that up to 40% of consumers who switch do not end up with a better deal.
The report also raises concerns about:
- the tendency for energy prices to 'rise like a rocket and fall like a feather';
- the growing complexity of tariffs; and
- the market dominance of the 'Big Six' vertically integrated energy companies.
The Committee singles out recent price increases from ScottishPower for particular criticism.
Customers who use the least energy will be hit the hardest from August when the increases are put into effect, providing an apparent incentive for higher consumption.
A push for higher energy consumption contradicts environmental concern over promoting energy efficiency.
Electricity and gas tariffs are now so complex that even the Energy Minister admitted he got confused when trying to switch.
The Committee is worried that a lot of people are perplexed by their bills and the vast array of different tariffs on offer. The industry should address these problems immediately without waiting for Ofgem or the Government to act.
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