Energy companies not hit with price cap

Energy companies not hit with price cap
24 June 2016

The Competition and Markets Authority (CMA) have published the final results of their two-year investigation into energy prices.

They have said that they're going to make suppliers hand over details of customers who have been on an expensive default tariff for three years or more, which means that other energy companies can contact them to offer them an alternative to switch to.

However, the CMA haven't issued a price cap, as hinted at for a while.

Roger Witcomb, the head of the inquiry, said: "Competition is working well for some customers in this market, but nowhere near enough of them. Our measures will help more customers get a better deal and put in place a modernised energy market equipped for the future."

Martin Cave, who was also on the panel, isn't happy.

The report says: "Martin Cave felt that the retail remedy package was unlikely to succeed in reducing, in a timely way, the significant level of detriment identified. In his current view, a short-term price cap, covering a substantially larger number of customers, is required to reset the market."

There's been years of complaints about energy companies overcharging customers, and indeed, the CMA said that the “big six" suppliers had indeed overcharged customers by £1.7bn a year between 2009 and 2013.

However, they've stepped away from any notion of tough actions and wholesale price caps, instead, limiting a price caps to prepayment customers.

Independent supplier, First Utility, reacted angrily: "The CMA has completely missed the mark, having spent two years debating how to fix the industry."

GB Energy Supply, another independent supplier, said: “The CMA's decision to remove the 'whole of market' requirement is completely illogical and totally at odds with government policy to promote competition and encourage switching."

TOPICS:   Utilities

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