by Trevor Loveday
Ofgem’s proposals for reform of the retail market “seem to be plugging a dyke as successive holes appear”, according to energy expert and adviser to the regulator, Catherine Waddams.
Her comment was among formal responses to Ofgem’s consultation on its Retail Market Reform (RMR) for domestic customers.
Waddams’ team at the Centre for Competition Policy labelled the reforms “increasingly intrusive regulation”. RMR seeks to simplify consumers’ choice of tariff to ease new suppliers’ entry to the market.
“We fear that attempts to deliver social outcomes through a competitive market are likely to achieve the worst of both worlds,” she said.
Other responses expressed similar concerns.
Consumer organisation and switching site Which? said Ofgem should use the reforms “to make it far easier for consumers to understand prices and identify cheaper offers. We do not believe the tariff reforms in the RMR go far enough in promoting this objective”.
Watchdog Consumer Focus was also sceptical that the reforms would motivate consumers to participate more in the market.
Independent supplier Ovo said it was “disappointed with the proposals”, saying they would fail to break existing barriers to competition.
Some of the big suppliers were less critical. EDF called for further simplification of tariffs. Eon, while expressing concerns about increasing regulation, welcomed RMR as a way to “restore trust”.
Responding to criticism that its RMR analysis and impact assessment lacked rigour, Ofgem said it would do more work and seek further consultation “before winter”.
This article first appeared in Utility Week’s print edition of 25 May 2012.
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