Giving evidence to the Energy and Climate Change Select Committee (ECCC), the interim chief executive at Ofgem, Andrew Wright, said the energy companies have to “earn the right” to make a profit through good customer service.
Wright also said that transparent information from the energy suppliers on the profit they make is important “because it helps build trust and confidence in the market”.
He added: “The consumers need good information on costs and profits in order to give them confidence that the companies are not profiteering at their expense.”
This comes after Ofgem’s latest annual review revealed the big six energy companies’ profits fell by £133 million (3.4 per cent) last year.
Wright also told MPs that there was a “deep mistrust of anything the energy companies do or say” from consumers, as there has been a “breakdown in trust”.
“Customers are not convinced that the price increases they see are either fair or justified” and he added that “it is not surprising that consumers jump to the conclusion that prices are being driven by profiteering.”
He said that the changes under the Retail Market Review are only just starting to be implemented but that “it has never been easier than today for consumers to change their supplier”.
Wright told MPs these reforms have made the market “much simpler than a year ago”, but he added that Ofgem is looking at whether more can be done to improve the market for consumers and to rebuild trust in the energy market.