Richard Lloyd, executive director of consumer rights organisation Which?, said the reforms were a step in the right direction but did not go far enough:
– Richard Lloyd, executive director, Which?
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.
Energy regulator Ofgem hopes changes, including banning suppliers from offering complex tariffs, will help simplify the market for the consumer.
Here are some of the key points:
Simpler tariffs - from 1 January
- Suppliers will be limited to offering up to four "core" tariffs per fuel (electricity and gas) and per meter type
- Complex multi-tier tariffs are banned and suppliers must structure their tariffs using only a single unit rate
Clearer information - to be introduced from April 2014
- New rules will be in place requiring suppliers' routine communications to consumers to be clear, easy to understand and personalised to them
- Suppliers will be required to give all their customers personalised information on the cheapest tariff they offer for them
- Suppliers will use a new Tariff Comparison Rate, in bills and a range of other communications, to help customers compare tariffs at a glance
- Ofgem is also requiring suppliers to provide personalised cost projections for the following 12 months based on the customer's actual, historic consumption
Ofgem has said its latest reforms are aiming to "restore consumer confidence" in the energy market.
The energy regulator unveiled reforms including banning suppliers from offering complex tariffs to create a "simpler and clearer" market.
Andrew Wright, Ofgem Chief Executive, said: "It is getting easier for consumers to get a better energy deal and by April further help will arrive in the form of much clearer and personalised information.
"The aim of our simpler, clearer, fairer reforms is to ensure competition bears down hard on prices. 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 company said they would "not hesitate to take further action" if it sees "evidence of further barriers to competition", adding that they would produce an annual report to consumers on the health of the energy market.
Energy regulator Ofgem has unveiled reforms designed to create a "simpler, clearer and fairer energy market".
The organisation say they are banning suppliers from offering complex tariffs and will take steps to simplify the charging system.
Reforms include limiting suppliers to just four tariffs per customer for both electricity and gas.
Further changes, due to be enforced from April, include making suppliers tell customers regularly which of their tariffs are the cheapest.
The body claim the reforms are the biggest changes to the retail energy market since competition was introduced in the late 1990s.