Home Energy Tariff Plus Conduct Reforms Begin To Take Effect
By Cynthia Taylor
Ofgem, the energy regulator has said that gas and power suppliers are to be restricted to 4 core household tariffs for each fuel by the end of the year, baring any appeals.
New Standards of Conduct, which will be backed by fines if it is necessary will come into effect at the same time. These Standards of Conduct will cover household energy suppliers who have contracts with their customers, when they market energy deals with potential consumers, and also to make amends when their customers make complaints about aspects of their energy supply.
Ofgem said that the suppliers will have to now operate in a honest, fair, transparent and professional manner. They will need to ensure that information given to customers is easy to understand, clear, and that the writing is jargon-free.
The suppliers has 20 days if they wish to appeal these reforms with the Competition Commission.
Ofgem continued that the magnitude of these reforms the implementation will be done in phases to give suppliers time for their systems to be geared up to be able to deliver the changes.
By year end 2013 the energy suppliers will be limited to having only 4 core tariffs for each fuel – gas and electricity.
All of the tariffs will offer a standing charge as well as a unit rate. Suppliers will be able to set the standing charge at zero if they wish to do so, and its reported that some are doing this.
The energy suppliers will be allowed to offer these tariffs to collective switching schemes. They will also be allowed to offer extra fixed term tariffs to schemes that meet Ofgem's criteria.
Online account management and Duel Fuel discounts will still be available in the simplified form. An example, a supplier would be able to offer a customer on direct debt, a choice of only four gas and four electricity tariffs. Thus a customer will be able to choose a Duel Fuel discount and also an online account management discount.
By 30th June all households that are still on an existing dead tariff - one that is no longer being marketed – has to be transferred to the cheapest variable rate. The energy supplier will only be able to keep a customer on a 'dead rate' if its cheaper or the same rate as the lowest tariff.
As of 22th October 2013 energy suppliers will be not be allowed to increase prices, on fixed term deals or make any changes to the fixed term rates, that is except the structured price increases that are set out in advanced.
Energy Suppliers will also not be allowed to roll forward household consumers on to any fixed term contract without their consent.
At the End of March 2014, the energy suppliers have to give all of their customers information that is personalized about the cheapest tariff that is on offer, and also provide new Comparison Rate for tariffs. This will be similar to the APR comparison rate that is used for Credit Cards which will help customers to be able to compare tariffs and make informed choices.
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