In just a month, the provisional findings of an investigation into the energy market are due to be revealed. We’ve written to the body carrying out the investigation, with five tests we’ll judge its suggested remedies against.
We’ve highlighted the failures of this market for many years and welcomed Ofgem’s decision to refer the market to the Competition and Markets Authority (CMA).
More than 200,000 people have backed our Fair Energy Prices campaign, calling for simpler and fairer energy pricing, and there is a clear expectation that the CMA will intervene to improve consumer outcomes and restore trust.
What the energy investigation must do
We believe that any remedies the CMA suggests must:
- Increase consumer engagement and introduce reforms such as simple pricing to make the market less complex for consumers
- Protect consumers who are unable or choose not to engage and as a result languish on poor-value standard variable tariffs
- Ensure smaller suppliers can genuinely compete with the Big Six suppliers, looking particularly at vertical integration and the effect it has on new entrants
- Deliver greater transparency over Big Six profitability especially whether there is sufficient competitive pressure to ensure wholesale price cuts are passed on fairly
- Improve liquidity in the market and ensuring better information is provided on wholesale trading
We expect the CMA to set our clearly its findings and conclusions in response to each of these tests.
Fundamental failings must be exposed
The inquiry represents a rare opportunity for the CMA to put to bed the long debate over the extent to which the energy market is performing competitively, efficiently and in the interests of all consumers.
While it is vital that the CMA takes its time to get the remedies right, the level of public expectation is significant and reforms that address the fundamental failings of the market are needed.
Read our open letter (pdf) to the CMA.