Finding a better energy deal is set to get easier with our ban on complex tariffs coming into effect today.
From 2 January 2014, we are banning suppliers from offering complex tariffs, for example where consumers are initially charged a higher rate which falls the more they use.
The reforms also mean that once a consumer has decided how they want to pay for energy, they will have just four tariffs to choose from for gas and four for electricity, from each supplier.
Together, we believe these changes will make it far easier for consumers to compare and understand deals and find the best tariff for them.
The changes are part of our reforms for a simpler, clearer, fairer energy market which aims to ensure suppliers work harder for consumers by competing keenly to offer the lowest prices and the best service.
These reforms are the biggest changes to the retail energy market since competition was introduced in the late 1990s.
- Suppliers are now only allowed to have one structure for tariffs – a unit rate (or unit rates for time of use tariffs) and standing charge, which can be zero. This will make tariffs more consistent and easier to compare.
- Suppliers are also banned from automatically rolling householders on to another fixed-term offer when their current one ends.
From April 2014 a range of reforms are also coming into force to give consumers much clearer information on energy. For example, suppliers will have to tell consumers regularly in writing which of their tariffs is cheapest for them on bills, annual statements and other communications.
The ban on complex tariffs follows our introduction of new consumer protection rules in October 2013. These rules ban suppliers from increasing prices on fixed-term tariffs, or making other changes to fixed-term contracts which are to the disadvantage of a customer.
Since the end of August 2013, all suppliers have also had to meet our new standards of conduct. These require suppliers to treat all consumers fairly and in an honest, transparent and professional manner. They must make sure that any information given to consumers is clear and easy to understand.
The reforms are backed by our powers to take action against suppliers if they break the rules.
We will also produce an annual report for consumers on the health of competition in the energy market, the first of which will be published in March 2014.
We will not hesitate to take further action if we see evidence of further barriers to competition.