Ofgem – your ‘radical overhaul’ isn’t radical enough

For a start :
Display tariff details prominently on bills and in online account details.
Give different tariffs proper easily distinguished codes rather than long names which all seem the same!

Rather like the Irish man in the joke who, when asked how to get to London replied “Well, I wouldn’t start form here”, my response to this is that we are starting from the wrong angle: Energy tariffs should be fixed across all suppliers and there should be no question of switching suppliers to get a better rate. Additionally all suppliers should be legally obliged to supply all types of customer at the same rates, i.e. there should be no difference in what is charged if you pay by direct debit or by cheque, if you conduct your account on line or the traditional way, etc.

In other words, effectively, the energy supply industry should be renationalised.

I don’t see how, in a privatised, capitalist, “free” market, it is ever going to be possible to get the sort of transparency, fairness and ease that is being asked for: to have these things would be to make the market unattractive to shareholders and investors, so I think we are starting in the wrong place and expecting the impossible.

Sadly I don’t see any chance of any government renationalising either, so I reckon we may as well all resign ourselves to the fact we’ll never get a fair deal.

I don’t completely agree that every tariff should be the same. If I pay in full, on time by bank transfer and I provide the meter readings on line, and receive invoices by automated email, negating the need for any manpower whatsoever, I should get a discount and pay less.

Someone who does none of these has to have the regular services of a meter reader, has to have someone send out a bill, needs to have someone to send the red reminder and then needs the use of a bank teller to take the cash payment, etc. Why should I subsidise them?

However, I do agree that the cost per unit should be level across the board with automatic discounts for everyone for night usage.

If the suppliers don’t want to play fair, then we should be allowed to buy our energy futures to stabilise our future budgets with the suppliers taking the hits if the price rises.

Hi all, some really interesting comments here. I’m not too sure about the idea of renationalising, so I spoke to one of our resident experts Fiona Cochrane, and here’s what she had to say:

“Renationalising energy supply is an interesting idea. One question that needs to be considered is whether people really want to choose either their supplier or their tariffs. Some may say that there’s not much difference between the bigger energy suppliers. But some of the smaller energy suppliers offer something different- well they need to if they are ever going to compete. So perhaps what is needed is a leg up for these companies to give us more real choice and exert pressure on the bigger players. There is also the question about the sort of companies that provide utilities – not just energy. Are shareholder based companies the best ones? What about not for profits? Or cooperatives?

“But back to renationalised or not- if we do continue with a market, that doesn’t mean that there isn’t room for streamlining the “bamboozling” energy offerings. Maybe this would encourage suppliers to place more emphasis on competing on price or even customer service! Equally if there was renationalisation and we had state run energy suppliers, that doesn’t mean there would be a single price. Aside from the different costs of distributing energy around the country, the different payment and account management methods have different costs- so why shouldn’t someone see the benefit from having an account that is cheaper to run than their neighbours?”

Regarding your six week price guarantee, the Third Energy Package is in the process of being transposed in the UK. This will reduce the time taken to complete a switch of supplier to three weeks, down from the current four to six weeks. So that will be an improvement.

What happens if you sign up right to a new supplier or tariff before a company announces an across the board price increase? The six week guarantee might give you an extra week or so at the old, pre-increase prices but they’ll go up just like everybody elses once that period is over. Is that really going to restore trust or faith in the process? Or is it just a very temporary delay to what would happen anyways.

I think it is right that Ofgem has focussed on simplifying tariff structures – that has the better chance of making the market easier to understand for the average person.

An interesting development from Ofgem announced today – energy suppliers must give 30 days advance warning if their prices are going to increase. We welcome this move, as we’ve campaigned for years to make advance warnings mandatory. http://www.which.co.uk/news/2011/03/energy-suppliers-to-give-30-days-price-rise-notice-249038

This has been on the cards for some months but has officially been given the green light today, coming into effect on 28 April. Good news, but unless prices are guaranteed for a set period, people who switch could find the price they end up paying isn’t the one they signed up for, so Ofgem will need to keep a watchful eye on this.

Ofgem do not have the power to introduce radical changes against the wishes of the large power companies.
Ofgem should have the power to set the tariff for all domestic, small comercial and small industrial consumers and to ensure that large consumers are offered an economical tariff. The U K is a relatively small island and therefore there should be only two prices for any one category of consumer throughtout the land, including the islands.The two prices to be a twentyfour hour use and an off peak charge as at present.The aim of the price control would be to fix the tariffs for the following six months; changes would only be allowed if fuel costs increased and the current price became totaly uneconomic.The present NETA pricing system to be abondoned, generators would be required to submit their prices for the next month so that Ofgem could declare a variation in price, up or down, if justified.Coupled with this the utilities should be reformed by statute so that they have to be British companies, registered in this country and their shares changed to non voting bonds paying a maximum dividend of 5 pence per bond; they would also have the duty to ensure that the supply would be guranteed at all times to meet the present and future demand; Ofgem would also to have the same duty and to ensure that the price of electriciy was the most economical.In short the utilities would be required to place the good of the country before their companies interests.Ofgem in conjunction with National Grid would decide where and when new power stations and grid reinforcements were necessary. National Grid would become a subsiduary of Ofgem.
It should be established that essential utilities are controled by one overiding authority and not left in the hands of dozens of private companies who will to some extent put the interests of their
company before that of the country.
In addition all “carbon and so called environmental taxes ” should cease, Ofem should have the duty to ensure that the best interests of the country are implemented without the need for taxes of any form.
Similar arrangments should be applied to the water and supplies.