Price caps for energy firms?

10 March 2016

energy bills The Competition and Markets Authority (CMA) are proposing a price cap, in a bid to stop The Big Six energy suppliers from overcharging 4 million homes which use pre-paid meters. This is great news for low-income households, should the proposal become a reality.

Of course, other customers are also being overcharged, as it looks like the energy companies have managed to avoid heavier sanctions, which many had hoped for, following the CMA's investigations.

Roger Witcomb, head of the investigation, said: "We have found that the six largest suppliers have learned to take many of their existing domestic customers – some 70% of whom are on ‘default’ standard variable tariffs – for granted, not just over prices, but with their service and quality."

"Yet in those parts of the retail markets where competition is working, customers are benefiting to the tune of hundreds of pounds a year by switching. We’re proposing a wide range of bold, innovative measures to enable competition to grow further across the market so that millions more households will benefit."

So, instead of hauling the energy companies in, it looks like there's going to be an increased push to get customers to switch to energy providers who are better suited for them. Of course, if they're all ripping everyone off, it'll be like choosing which colour of shoe you'd like to kick you down some stairs.

There's other knock-ons from this report too - it looks like British Gas are going to be made to open up their customer databases to their rivals, for reasons unclear. The inquiry, which has been running for 18 months, wants to find out whether or not SSE, Scottish Power, British Gas, Npower, E.ON, and EDF are abusing their influence on the energy market.

Many had hoped that the companies were going to be broken up, it appears that - for the time being - the Big Six have avoided that. This was a golden opportunity to get the energy market sorted out, once and for all, but alas, it looks like the energy firms have been left off the hook.

Richard Lloyd, the big cheese at Which!!!, said: "After two years of this energy inquiry, there is still a long way to go before we will have an energy market that works for all consumers."

"While it is right to ensure that vulnerable customers on pre-paid meters are quickly protected, there are many people struggling with their bills who will not be helped by this price cap. And the regulator must make sure that releasing customer data to rival suppliers is done so that it genuinely helps people switch from the most expensive tariffs to better deals, rather than result in more unwanted nuisance calls."

TOPICS:   Utilities

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