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Ofgem protects the interests of gas and electricity consumers in Great Britain by promoting competition and regulating monopoly network companies.
Retail Market Review
Following an investigation into the gas and electricity retail markets in Great Britain, we found that action is needed to make things work more effectively in the interests of consumers. Consumers may be at risk from a number of features in the market which reduce the effectiveness of competition.
Our proposals for action are designed to:
- make it much easier for consumers to identify who is offering the cheapest tariff
- make it easier for new suppliers to enter the market
- enforce and strengthen Probe remedies in both the domestic and non-domestic market
- increase the transparency of company accounting practices.
Read the full details of the Retail Market Review and follow its progress here.
Liquidity refers to the ability to buy or sell a product - in this case electricity - without causing a significant change in its price.
We are proposing to make market entry easier by improving the availability of wholesale power products. Our monitoring has found that liquidity is low in some parts of Britain’s wholesale electricity market. This can mean it is difficult for independent suppliers (those without their own generation) to buy and sell what they need in the wholesale market, and therefore to enter and grow.
We have proposed that the Big Six energy suppliers be required to sell 25 per cent of their generated power in an auction. In volume terms this represents nearly half of all household power use and could therefore significantly improve the market for independent suppliers, a change that should result in stronger competition and a better deal for the consumer.
Liquidity: making the electricity market more competitive for consumers.
Regulating the gas and electricity market
Ofgem acts in the interests of consumers by investigating companies which may be:
- breaching the terms of their licence;
- acting anti-competitively; or
- breaching consumer protection law
Where we find against a company we have powers to seek redress, for example through the levying of fines (these are passed in full to the Treasury) and the issuing of final and provisional orders. Examples of recent actions include:
- A proposed settlement that should see EDF invest £4.5m in assisting vulnerable customers following an investigation into sales practices;
- Fines against National Grid Gas (NGG) and Northern Gas Networks (NGN) of £4.3m and £900,000 respectively for failing to attend and assess gas escapes on time;
- A fine of £2.5m and £2m against British Gas Trading Ltd and RWE npower plc respectively for failing to handle customer complaints appropriately;
- A fine of £15m against National Grid for failing to comply with the Competition Act 1998 in its long term metering contracts; and
- A provisional order against First Utility requiring it to comply with the terms of its supply licence to offer pre-payment meters to customers in payment difficulty.
Full details of our enforcement activity can be found at:
Ofgem – Enforcement
Consumers and energy companies: answering enquiries and resolving complaints
Energy companies should be able to answer enquiries from consumers and explain how any relevant legislation they may quote applies to consumers.
We also know that as a consumer you can run into difficulties with an energy company and that disputes can arise. In the first instance you should always try to resolve your dispute directly with the energy company. Energy suppliers and network operators are subject to strict complaints handling standards and are required to have procedures for dealing with complaints from domestic and micro business customers.
If after eight weeks your complaint has not been resolved to your satisfaction (or sooner if the energy company informs you that they are unable to progress your complaint any further), you may wish to contact Ombudsman Services: Energy. The Ombudsman is responsible for investigating individual complaints made against energy companies by consumers.
Ombudsman Services: Energy website
Advice is available from other organisations such as Consumer Focus and Citizens Advice, including on how to raise and resolve a complaint with an energy company.
Read more: Resolving a complaint with an energy company
Ofgem and Consumer Complaints
Ofgem does not play a role in investigating individual consumer complaints against energy companies. However, we do regularly receive information and data from a variety of sources, including energy companies, the Ombudsman, Citizens Advice, and Consumer Focus about complaint levels, patterns in the nature of complaints and issues of concern. Where appropriate we will consider action against suppliers and network operators in line with our enforcement powers.
Following discussion with Ofgem, the largest suppliers now publish quarterly data on their complaints handling on their own websites. You can read about this and also access the data in question at Supplier data on customer complaints.
The Ofgem Consumer Affairs Team manages consumer-based enquiries and referrals regarding Ofgem’s policies and functions. It does not deal with individual consumer complaints against companies.
For more information visit Ofgem: Contact us