Energy reforms will force suppliers to tell customers about their cheapest tarriffs

Oct 19 2012 By Cheryl Mullin

ENERGY suppliers will be forced to tell customers about the cheapest tariff they have on offer under proposed reforms for the industry unveiled today by the energy watchdog.

Ofgem said its plans will put an end to consumers being confused by complex tariffs and will usher in a “simpler, clearer, fairer and more competitive” energy market.

The plans come after Prime Minister David Cameron was accused of backtracking on a commitment to require energy firms to give households the cheapest deals – rather than simply inform consumers what is available, as unveiled by the regulator today.

Ofgem is extending proposals unveiled last year to simplify tariff structures and limit core tariff numbers across the whole market.

The regulator proposed that suppliers should offer four core tariffs to cut the “baffling” array of tariffs currently on the market.

This will actually mean four tariffs per fuel type – electricity and gas – to apply to each payment type.

“Dead” tariffs no longer available will be banned to reduce the overall number of tariffs and reduce the risk of people paying too much, Ofgem said.

The watchdog wants to introduce new tools to help consumers switch energy account.

As well as giving customers information on the cheapest tariff they can offer them, Ofgem has proposed a scheme where suppliers offer vulnerable customers and others who have not switched for some time an estimate on the cheapest tariff across the whole energy market.

In a bid to make the market “fairer”, Ofgem plans to ban price increases or other changes to fixed-term tariffs.

The package of proposals will be published before the end of October alongside its non-domestic proposals.

Ofgem is legally required to go through an extensive consultation process but wants to start to introduce its reforms by summer 2013.