OFGEM report due out today

[enaid]

Ofgem sees faults in power market


Ofgem said the market was working well for most consumers


The energy regulator, Ofgem, has told power companies they need to deliver the benefits of competition to all of their customers.
It said it was unfair that 4.3 million customers with no gas supply could not get the best deals on electricity.
It also proposed rules to stop firms charging different amounts to customers who pay in different ways.
But the regulator found no evidence that energy companies had been working together to set prices.
Ofgem started the investigation in February after all the leading suppliers imposed big price rises at the same time.
There will now be a consultation on the report, which will end on 1 December.
The regulator said that the market was working well for most customers and pointed out that competition could not stop rising prices of oil and coal from pushing up bills.
However, it said energy firms could do more to make sure that all customers were able to access the best tariffs.
"Initial findings from our energy market probe give us grounds to demand that companies end practices that hinder customers, especially the vulnerable, from getting the best deal," said Ofgem chief executive Alistair Buchanan. He threatened to refer the industry to the Competition Commission if it did not voluntarily meet its concerns. There has been widespread criticism of the billing system for customers on pre-payment meters, who are charged more for their fuel than those who pay by direct debit

[Paule]

Re: OFGEM report due out today

Heres the Report

Overview
Concerns have been expressed about the operation of Great Britain's gas and electricity retail supply markets for domestic and small business consumers.
These concerns are heightened by recent price increases, caused by hikes in global fuel prices. It is even more important that retail markets work well when prices are as high as they are now.

Overall, the transition from monopoly gas and electricity supply ten years ago to competitive markets is well advanced and continuing to develop. Many consumers have benefited from lower prices, better service and a wider range of deals on offer. The Big 6 suppliers are acting competitively and we have found no evidence of cartels.

This interim report has found some important areas where the transition to competitive markets now needs to be accelerated. Many consumers are not yet benefiting fully from the competitive market and vulnerable consumer groups are disproportionately affected.

We are today consulting until 1 December 2008 on a package of measures to address these issues. We remain convinced that consumers benefit most from a vibrant competitive market and our proposed measures aim to improve the functioning of the market. Subject to consultation, we will seek agreement with suppliers on the proposed reforms. If agreement is not forthcoming we will consider making a market investigation reference to the Competition Commission.