UK: Energy customers need better ways to shop, save

In the wake of rising energy prices and another winter — with its costly household heating demands — on the way, the UK’s energy secretary is proposing toothier regulations for energy companies and more protections for consumers.

Among the changes Energy Secretary Chris Huhne is looking for: a speedier ability for consumers to switch energy companies, and a right to know about potentially cheaper energy prices.

Huhne also called for Ofgem, the nation’s energy regulator, to be able to implement decisions on energy companies without being forced by those companies to seek a second opinion from the Competition Commission. Such appeals can currently take up to a year to resolve.

In the past year, Huhne has directed steady scrutiny at Britain’s energy companies, especially the dominant “Big 6”. Earlier this month, he urged them to dramatically pick up the pace at which they’re helping customers insulate their homes, a strategy aimed at helping meet UK carbon emission reduction goals. He’s also advocated making easier for smaller energy companies to compete and for suppliers to improve billing methods to help customers understand how to save money.

Among the latest changes Huhne is seeking:

• A new appeals process for Ofgem that will also be open to small energy companies. This change is set to come into effect by the end of the year, subject to Parliament approving regulations implementing the European Union’s Third Energy Package.
• Giving customers the right to change energy companies within three weeks, once their cooling-off period has elapsed. Energy suppliers will be required to tell customers what their rights are and help them understand what they should expect.
• New powers to let Ofgem require energy companies to provide refunds or some other kind of redress when consumers have lost out as a result of a company breaching a license condition.
• As assessment by Ofgem to see whether some energy companies are hindering competition by charging one price to existing customers but offering much cheaper deals online, which could be making it harder for small suppliers to compete.
• The creation of a working group to examine the potential for collective purchasing and switching in the energy market and review any barriers to helping consumers come together and get a better deal.

Huhne’s Department of Energy and Climate Change (DECC) has also created a new Energy Efficiency Deployment Office to promote a wider energy efficiency strategy across the country.