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Suppliers to operate under new standards

By Katie Anderson on August 29, 2013

Energy regulator Ofgem has published details of a new code of conduct for suppliers. 

Under the new system, suppliers such as British Gas and E.ON must adhere to strict rules on how they market their products and communicate with customers. The rules, which have been designed to simplify tariffs and improve transparency, are scheduled to come into effect by the end of the year.

Endorsed by Prime Minister David Cameron, the new rules ought to create a ‘cultural change’ in the way that suppliers go about their business in the UK. Although the reforms are not expressly intended to reduce energy bills for struggling households, indirect savings could be made if consumers are better able to identify the most appropriate (and affordable) deals for them.

Ofgem is no longer willing to sit on the sidelines as energy firms mislead and confuse customers. The new code of conduct should facilitate more open, honest and direct communications between suppliers and users. Suppliers must inform each customer of the cheapest tariff available (this information will be included on bills so that users can compare prices). Customers must also be treated with fairness.

But perhaps the most significant change is that suppliers will be required to limit the number of available tariffs per fuel type to four. That means customers will no longer need to compare a seemingly endless number of deals; indeed, suppliers will be compelled to tell customers which of the four tariffs per fuel source is the cheapest for their requirements.

Andrew Wright, Chief Executive of Ofgem, said: “Suppliers have already taken some steps to make the energy market simpler for customers and we welcome that, but our package of reforms means they must go further.

“The standards of conduct we have introduced require suppliers to go through a culture change in the way they treat customers”.

Richard Lloyd of Which? welcomed the changes but expressed his frustration over the extent to which the reforms will be able to make a difference.

He said: “Improving the way suppliers deal with their customers is a step forward, but Ofgem’s reforms to fix the broken energy market do not go far enough”.

Energy consumers keen to reduce their energy bills should consider the benefits of cavity wall insulation and loft insulation if they haven’t done so already. Installing a new A rated boiler is another way of improving the energy efficiency of your home. Check to see if you qualify for any Government boiler, central heating and insulation grants.