UK Energy regulator Ofgem has released full details of its proposals to simplify the energy market.
It has proposed a simple tariff with one standing charge and a simple unit price. But energy companies can also offer other fixed tariffs that protect customers from price rises.
Ofgem research found that 70% of customers would switch suppliers if tariffs were simpler.
It is also calling for standardisation of bills, statements, price rise notifications and contract renewal information across the industry. It wants suppliers to produce what it calls a ‘Tariff Information Label’, which clearly sets out the key information about the tariff.
When Ofgem conducted a review of the language used by suppliers to customers, it found that some terms were as complex as those in the Harvard Law Review.
It also wants suppliers to sign up to a new industry code of conduct, including agreeing to “not market products or services which are inappropriate”. They should also ensure that “customer service arrangements are fit for purpose”.
The energy industry has been heavily criticised in recent months for complicated tariffs and poor customer service. British Gas has now launched simplified tariffs for new customers.
Meanwhile, Scottish and Southern Energy has cut its number of tariffs by a fifth and E.ON is planning a major company review.
Consumer groups have broadly welcomed the proposals. However, Citizens Advice Chief Executive Gillian Guy said: “The crux of the problem [with the industry] still remains.
“Energy companies, and Ofgem, must guarantee to customers that prices are not being raised without good reason.”
