Britain’s energy regulator Ofgem on Friday revealed plans to make suppliers inform customers of their cheapest gas and electricity tariffs.
The watchdog said its proposals, which it described as “the most radical shake up of the retail energy market in more than a decade”, will put an end to consumers being confused by complex tariffs, leading to a “simpler, clearer, fairer and more competitive” energy market.
Ofgem also wants to ban “baffling” multi-tier tariffs and cap at four the number of tariffs a supplier can offer.
The regulator also wants to force firms to display their cheapest available tariffs on bills and for customers to default to the cheapest option at the end of fixed-term contracts.
They hope to start introducing the reforms by next summer.
The proposals come after Prime Minister David Cameron caused disarray Wednesday by telling the House of Commons his government would legislate to make gas and electricity companies “give the lowest tariff to their customers”.
After Energy Secretary Ed Davey distanced himself from the announcement, Cameron later backtracked, saying that he wanted to support people “who struggle to pay energy bills”.
Angela Knight, the chief executive of Energy UK, which represents suppliers, told BBC Radio 4 that Ofgem had put forward a “pretty challenging set of requirements.”
“What they are saying to us is (you should have) a very small handful of tariffs, you have got to be very clear on them and tell your customers about them and give the customer the choice,” she said.
“We need to have a set of proposals that are in the best interests of our customers and I think the customers do want choice.
“I do believe that choice is the right thing. I don’t think we should say to the customer ‘You must have this or that’.”
Energy watchdog reveals plan to flag cheapest tariffs
