News of our campaign to give gas and electricity users (aka citizens) confidence they’re getting a reliable supply at a fair price.
We’ve known for years that in the current market over half of all customers – those on standard variable tariffs – pay an unfair price. The government has stepped in and a price cap is to be introduced soon.
Reliable supply? The current market is failing here too.
For years Ofgem, the energy regulator, convinced that more competition will lead to lower prices, has encouraged new supply companies to enter the market.
It would be exaggerating to say supply licences have been tossed around like confetti but Ofgem is now so worried about its licensing policy it has announced a review of the whole approach. (1)
Ofgem insists customers have benefitted from its new entrant policy.
However, it accepts (grudgingly you may think as several firms have recently gone bust) that:
“….. low entry barriers, and more participants active in the market could increase the likelihood of companies entering the market who are not meeting expectations with respect to customer service and of supplier failure.” (our italics)
Citizens Advice has described Ofgem’s move as “a step in the right direction” (2). Our Director of Energy says:
“Ofgem needs to take back control of its licensing processes. It is too easy for energy firms to enter the market and the process for removing failing companies is too slow.”
The problem has not gone unnoticed in the City.
This month the Sunday Times reported that “…an estimated 37 of the UK’s 80 energy companies are at risk, according to analysis based on a leaked report from the City analyst Dun & Bradstreet.” (3)