News from IGEM UK

Millions could see cut in energy bills

The Competition and Markets Authority (CMA) has proposed a price cap for all households using pre-payment meters.

It has also proposed that the regulator, Ofgem, keeps a database of customers that have been on a standard rate for three years.

This database will then be opened up so these customers can be targeted directly by other suppliers.

The proposals are designed to reform the energy market and increase competition to help consumers save money.

The CMA also proposed:

ending the restriction on suppliers to offer just four tariffs
strengthening the ability of price comparison services to help consumers find the best deal
tackling "rollover contracts": where customers are automatically put on less favourable terms

They follow an 18-month investigation into the energy market by the CMA which found that, in total, customers may have been paying about £1.7bn a year more than they would in a competitive market.

Lowering bills

The CMA believes that those households using pre-payment meters, currently numbering four million, need protecting until smart meters are rolled out in 2020.

Those using pre-payment meters tend to be the poorer and more vulnerable customers who have difficulty setting up accounts with suppliers.

Roger Witcomb, chairman of the CMA's investigation, told the BBC that the price controls would lower bills by £300m in total, the equivalent of about £90 per household.