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Response to Ofgem’s consultation ‘Helping Consumers Make Informed Choices’

30 September 2016

Response to Ofgem’s consultation ‘Helping Consumers Make Informed Choices’

The Citizens Advice Service thinks that Ofgem’s proposed principles offer the best way of preserving key consumer protections in the post CMA world.

In terms of legal drafting, we would like to see Ofgem adopt a new approach whereby the new principles as well as the policy objective(s) are both contained within the licence. This would provide greater clarity for suppliers.

All of these new principles will require close monitoring. The CMA inquiry can only be judged a success if there are significant shifts in key market trends such as the percentage of more vulnerable households remaining on standard variable tariffs (SVTs), consumer understanding of energy bills, etc. Competition in the energy market must benefit the majority of consumers, not just the few.

In order to judge the success of the remedies, Citizens Advice would expect to see increases in the following indicators:

● Consumers are able to understand and compare tariffs, even the traditionally disengaged groups

● Improvement in energy literacy, such that more people understand their bills and know how to make effective choices, whether that is how to use less energy in the home or switch to a cheaper deal

● More of the ‘unplugged’ or ‘on standby’ groups of consumers engaging more regularly, particularly in the groups of stickiest consumers

● Reduction in the number and percentage of consumers on standard variable tariffs (SVTs) with suppliers making real efforts to get customers off their poorer value tariffs

● More suppliers entering the prepay market and offering better priced smart prepay tariffs

● Improvement in the quality as well as the quantity of switches so consumers aren’t put off from re-engaging