Ofgem has today (June 26th) confirmed that it has referred the entire energy market to the Competition and Markets Authority (CMA). After receiving this referral from the energy regulator, the CMA immediately began its investigations.
However, people fed up of the poor standard of service offered by their gas and electricity supplier may be in for a long wait, as the CMA is forecast to publish its findings and final decisions by December 31st 2015.
Brits have become incredibly distrustful of the Big Six energy suppliers in recent years – difficulties claiming on their boiler cover plans, billing errors, the constantly-increasing price of gas and electricity and poor standards of customer service have led to the majority of the public feeling that the gas and electricity giants are some of the least-reputable companies operating in the country.
The apparently relentless increase in energy costs, despite declines in the wholesale price of gas and electricity, has led some to believe that energy companies are colluding together when fixing prices or scheduling price rises.
Will the CMA investigation restore the public’s trust?
A recent Ofgem, Office of Fair Trading and CMA assessment of the energy market found that competition within the sector is not providing the consumer benefits that it should.
The analysis found that British consumers are becoming increasingly wary of energy suppliers, are uncertain about the relationship between the Big Six’s generation and supply businesses, and that profits for these companies are rising despite there being no evidence that they are becoming better at meeting their customer’s expectations or at reducing their own costs.
It will therefore likely take a lot more than an investigation – however in-depth – to restore the public’s trust in energy companies. Nonetheless, the assessment should enable suppliers to clear the air, the public to fully understand the competition issues in the energy market, and suppliers to amend their practices to become more competitive. This will be an important step should consumers ever regain their confidence and trust in the sector.
What will the CMA investigate?
The CMA will be able to decide the scope of its investigation and can then use its statutory powers to deal with any structural issues it finds are undermining competition. Therefore, the scope of the investigation is uncertain.
Ofgem said it intends for the CMA to look at the following issues:
- Any barriers to entry for suppliers
- Any barriers that prevent start-ups from expanding
- The relationship between the Big Six’s supply businesses and their generation businesses
- The profitability of the big Six
- The low levels of consumer engagement, which are contributing to the poor competition in the sector
- The way in which energy suppliers consistently increase the prices of their loyal customers and offer customers that switch energy supplier more competitive prices
- Whether competition between the Big Six is adequate
Should the CMA’s investigation be successful, it should ensure that there are no barriers preventing effective competition in the sector or preventing the benefits of a competitive marketplace from reaching consumers.
Ofgem is to continue working to protect consumers while it assists in the CMA’s investigation, and is to continue working towards providing Brits with the ability to switch energy supplier within one day, to enhance the support available for the most vulnerable consumers in finding the right deal for them, working alongside the government to ensure customers benefit from the planned roll-out of smart meters, and developing rules and regulations brokers will have to follow in the non-domestic gas and electricity market.
If you’re looking to switch boiler cover provider, then contact 247 Home Rescue. As an independent company that is unrelated to any of the Big Six or any other energy supplier, we can’t afford to offer uncompetitive boiler breakdown cover!
Having trouble with your boiler?
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Instead, call us on 0345 3192 247 and we can help. Our technical team will run through some simple troubleshooting to see if your problem can be resolved on the phone or they can book one of our friendly and knowledgeable Gas Safe registered engineers to get you back up and running as soon as possible.