The Department for Business, Energy and Industrial Strategy (BEIS) should take a fresh look at whether to accelerate its timeframe for updating the regulatory framework for the energy retail market, Citizens Advice has urged.
In its response to the department’s recently concluded call for evidence on the future of the energy retail market, the charity noted that its current retail market strategy says changes to the framework should only be considered in the late 2020s.
But Citizens Advice said BEIS should use a potential refresh of the strategy to consider if this timeline remains “appropriate” and can be “accelerated”.
If the late 2020s timeline remains as currently set out, BEIS should set out “least-regrets” steps which can be taken in the interim under the current framework to facilitate innovation that promotes decarbonisation efforts.
These steps could be integrated into Ofgem’s own forthcoming retail strategy, which should set out how it will support innovation in a “more consolidated market that places a higher priority on supplier resilience.
“This may require a more proactive approach than previously envisaged, including requirements on suppliers to support innovation trials or new models,” the response added.
In the immediate term, Citizens Advice called for a package of measures to help low-income households, including an ‘Energy Support Grant’ – a one-off payment to help all Universal Credit claimants in April with their energy bills.
The charity also urged the government to uprate benefits in line with the higher rate of consumer prices inflation, which is expected in March, rather than September’s 3.1%.
The response additionally warned that the millions of customers rolling onto price-capped default tariffs because their supplier has gone out of business or a lack of alternative fixed rate deals could further undermine trust in the market by creating a new reservoir of disengagement.
It said: “A higher proportion of consumers with providers or tariffs they have not actively made a choice to move to, and some consequently feeling a lack of trust towards the market having experienced poor service and supplier failure…could limit their willingness to engage in the future.”