Suppliers would be “spectacularly ill advised” to thwart Ofgem’s efforts to cap energy prices for vulnerable customers, the regulator’s chief executive has warned.
Delivering the keynote speech at Energy UK’s annual conference today, Dermot Nolan addressed reports that suppliers would withhold co-operation from the energy regulator’s efforts to introduce a safeguard tariff for hard up customers.
He said such a move would be “spectacularly ill advised”.
Nolan added: “We will extend price protection with or without the help of industry. I fully expect industry to co-operate on this in the most positive way possible.”
“Competition isn’t just about switching. Reforms are overdue: the regulator or Parliament won’t take no for an answer so you may as well embrace it because change is going to come.”
But he said suppliers should not use the introduction of a cap as an excuse to slacken efforts to make themselves more competitive.
“Now is the not to time down tools on competition,” he emphasised. “Instead if people want the cap lifted sooner rather than later, they should redouble their efforts.”
Nolan also told suppliers that they will be required to pay compensation to consumers for bungled switches.
“I am putting suppliers on notice that they need to have the right systems in place to ensure that switches go smoothly and we intend to require compensation to be paid to consumers if switches go wrong,” he said, adding that suppliers should put in place “faster switching for customers”.
He also said that “radical action” may be required to deliver a truly competitive market. As part pf this, Nolan said that Ofgem was exploring moves to introduce collective switching for disengaged customers, “rather than customers having to make active choices the switching could be made on their behalf”.
But he said that the introduction of collective switching would potentially require legislation.
He also said Ofgem was considering whether the supplier hub model, which had been in place since the privatisation of the 1980s was still fit for purpose.