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UK: Suppliers to pay compensation for switching woes decides energy regulator

Customers could be paid at least 30 pounds ($40.15) for any issue faced, such as lengthy delays in any repayment or incorrect billing, under proposals launched by regulator Ofgem on Tuesday.


Reuters 12 Jun 2018, 11:40 AM United Kingdom
  • Britain's six biggest suppliers are Centrica's  British Gas, SSE , E.ON , EDF Energy , Innogy's  Npower and Iberdrola's  Scottish Power. (Image Credit: Facebook)

Britain's energy regulator plans to force companies to pay compensation to customers facing problems when switching supplier, in a bid to encourage more people to make the change.

Customers could be paid at least 30 pounds ($40.15) for any issue faced, such as lengthy delays in any repayment or incorrect billing, under proposals launched by regulator Ofgem on Tuesday.

The Competition and Markets Authority (CMA) found households overpaid 1.4 billion pounds a year from 2012 to 2015 because of uncompetitive standard tariffs, prompting the government to encourage people to switch supplier.

Switching to smaller independent suppliers has cut the market share of Britain's big six energy suppliers to a record low in 2017 of 79 percent for electricity and 78 percent for gas, compared to 84 percent for both in 2016.

Britain's six biggest suppliers are Centrica's  British Gas, SSE, E.ON, EDF Energy, Innogy's  Npower and Iberdrola's  Scottish Power.

The new proposals, which could be in place by the end of 2018 should boost consumer confidence in switching, Ofgem said.

The regulator said most switches ran smoothly but some customers have faced issues such as struggling to get money back from old suppliers when they were in credit or being incorrectly billed.

Ofgem also plans to introduce a price cap for standard tariffs by the end of the year but has said switching supplier may still offer the best value even when the cap is in place.


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