Citizens Advice’s response to Ofgem’s call for evidence on consumer impacts of market wide settlement reform
Citizens Advice welcomes Ofgem’s timely call for evidence to consider the consumer impacts of market wide settlement reform.
This reform is an important enabler of demand side response (DSR) and as such presents a range of opportunities for the energy industry, consumers and the country. If delivered well, DSR can result in mutual benefits as individual consumers may be able to save or earn money through being responsive to signals such as price, while the energy system can avoid building unnecessary generation and network assets.
However, DSR also presents several risks. It is possible DSR may leave some consumers behind, picking up a higher bill because they are less able to change when or how they use electricity. These consumers may need further protection or assistance to ensure they still pay a fair, affordable price for their use.
Based on our experiences of consumers and the energy retail market, Citizens Advice has set out the following principles which future flexibility offers should adhere to. These are:
Flexibility offers must be fair and inclusive for consumers
Consumers should be given the choice to participate and should save or earn money, ensuring the value of flexibility is given back to consumers
There must be clear, transparent information and fair terms and conditions
Information, services and tools should be provided to help consumers decide the suitability of different models. Service providers need to be responsible for recommending appropriate products, and should regularly reassess this, whilst consumers should have the freedom to move easily between or leave contracts if their circumstances change.
There should be sufficient interoperability to ensure consumers can use technologies with multiple service offers.
Consumers should retain a level of control they feel comfortable with, if there is increasing automation
Service providers must respect consumer rights to data privacy , transparency and control
There should be appropriate consumer protections , including protection from bill shocks and damage to flexibility assets
There is clear dispute resolution routes and single point of contacts
Those who don’t participate in DSR should not be charged beyond what is cost-reflective and people who struggle to pay their bills should be appropriately supported.