In February 2008 Ofgem launched the Energy Supply Probe - an investigation into the markets in electricity and gas supply for households and small businesses.
We published our initial findings in October 2008. We reported that the market is working well in important respects: there is no evidence of a cartel; and retail price rises can be justified by wholesale costs. However, we found that competition is not yet fully effective in all sectors of the market – with the result that not all consumers are reaping the full benefits of competition.
We remain convinced that consumers benefit most from a vibrant competitive market and, following an extensive consultation process, developed a package of measures to improve the functioning of the market.
The first part of this package addresses concerns over unjustified price differentials through two new license conditions for domestic suppliers, which came into effect on 1 September 2009. These:
- Require any difference in the terms and conditions offered by suppliers in respect of different payment methods to be cost reflective; and
- Prohibit undue discrimination in any terms and conditions offered to consumers.
The second part of the package promotes competition and consumer engagement and includes obligations on suppliers to:
- Improve the information that they provide to customers on their bills and in a new annual statement;
- Help vulnerable and indebted consumers who are currently blocked from changing suppliers due to outstanding debts;
- Improve the conduct of their sales and marketing activities;
- Help small business consumers by providing them with better information regarding the terms and conditions of their contracts; and
- Improve the transparency of their supply and generation activities.
These measures were introduced into suppliers’ licenses in October 2009, with implementation dates between October 2009 and July 2010.
All the reports and consultations released during our investigation can be found in the table below. Copies of all non-confidential responses to those publications can be found by clicking on the relevant document title.