Unless the “two tier” energy system can be ended and customers persuaded they are not being “ripped off” then the government will be forced to take radical action, delegates at Utility Week’s Energy Customer Conference were told today (19 January).
“This issue isn’t new but it is the issue of the day,” said Ofgem senior partner for consumers and competition Rachel Fletcher. “The new government has pretty much made it clear that industry is in a last chance saloon and that this issue needs to be addressed urgently.”
Fletcher said the current situation, whereby around two thirds of customers are stuck on expensive standard variable tariffs, is “not sustainable or politically acceptable”.
Chair of the Competition and Markets Authority investigation into the energy market, Roger Witcomb, thought the same: “This argument is not settled. It really isn’t… When you see senior politicians saying ‘Why should loyal customers have to shop around?’ that is actually saying ‘Why do we have a competitive market in supply?’.
“Competition requires active customers. If you are saying ‘Why should customers be active?’ you’re saying ‘Why should we have competition?’. There’s a very big issue out there.”
Witcomb said the biggest barrier to engaging customers and ending the two tier market is persuading them they are not being short changed: “There is a feeling that we’re being overcharged and you can’t trust any of them so what is the point of engaging.”
He said if consumers’ trust can not be won there is “a real danger that if not now, perhaps at some stage in the fairly near future, the energy retail market will become a thing of the past.”