Responding to calls that it must “up its game” and do more to protect people from high energy costs, Ofgem said it is determined to deliver a “fair deal” for all consumers.
Last week BEIS (Business, Energy and Industrial Strategy) committee chair Rachel Reeves writing for Utility Week rounded on the regulator, saying it had been “too slow and too reluctant to use its powers to step in” to help households, especially vulnerable customers.
The criticism came as the committee backed the government’s draft legislation for a price cap on the most expensive type of gas and electricity bills, standard variable and default tariffs.
“We have called on Ofgem to be much faster and more proactive in using its extensive powers from overcharging in future,” Reeves said.
Ofgem said protecting vulnerable customers was a “priority” and pointed to how it had extended the so-called safeguard tariff to an extra one million households who currently receive the warm home discount.
In a statement it said: “Ofgem is determined to deliver a better deal for all consumers. This is why we are pressing ahead as quickly as possible with plans to further extend price protection from five million consumers to all those on poor value default deals as soon as the tariff cap is passed by Parliament.”
It continued: “Even when energy costs rise, people on the worst deals are better off under the safeguard tariff, as they can be sure that they are not overpaying for their energy and any rise is justified.”
The regulator, which confirmed some customers on the worst SVTs are paying £300 more than those who do not switch, said: “That is why we are also actively trialling innovative solutions to further help consumers engage in the market.
“We believe the combination of price protection and innovation to boost competition will deliver a better deal for consumers and undermine the power of the six largest suppliers.”
Ofgem has also announced it is working at bringing in next day switching for those on the worst tariffs by launching a “simplified collective switch”.
Its chief executive Dermot Nolan previously admitted to MPs that the regulator “should have done better” in protecting low-income households from high energy costs but reiterated it does not have the authority to introduce a market-wide cap without a law change.