The latest reforms to the energy market in the UK are due to be introduced this year. But, with some confusion over the effects they will have on bills, how exactly will they impact consumers? Well, according to the regulator Ofgem, the reforms, which are due to be introduced in April, should benefit customers in the future.
Reports into the effects they will have on tariffs show that, current tariffs, which can be confusing for some customers, should be simplified going forward. They will mean that suppliers will only be able to provide four tariffs for gas and electricity, creating a clearer market and improving levels of trust in the industry. Customers will be able to compare the different rates offered, and all quotes and bills will include forecasts in a “personal projection”.
This will allow consumers to see estimates of their future bills based on how much energy they use. Any increases will then be clearly shown on their bills. Furthermore, discounts will be simpler and easier to understand and suppliers will be legally required to advise their customers if a cheaper tariff is available to them. In an interview, when commenting on the changes,
Ofgem chief executive Andrew Wright said: “Profits are not an entitlement, they should be earned by companies competing keenly to offer consumers the lowest prices and the best service. Now it is up to suppliers to build on our reforms to restore consumer confidence in the energy market. There are good signs that they are taking up this challenge.”
The changes have also been welcomed by other consumer groups as they drive competition and should bring down prices. For instance, director of consumer group Which? Said: “This is why the Government should intervene with more radical measures including simpler pricing, greater transparency and scrutiny of the cost of energy policies, and the separation of domestic supply from generation businesses. More must be done to keep prices in check and give consumers confidence that the price they pay for their energy is fair.”
Additionally, Mike O’Connor of the group, Consumer Futures, noted: “Consumers need a market they can trust and this reform package brings that closer. We have allowed what should be a market for an essentially simple service to become a byword for complexity and confusion and sometimes very dubious practices.”
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