Energy bills: 30-day notice for price rises

 
Oven The move comes as Ofgem consults on plans for clearer billing

Consumers must now be told about energy price rises 30 days in advance, rather than being notified up to two months after the event.

The changes made by regulator Ofgem strip away previous rules that meant suppliers had 65 working days after prices had risen to tell customers.

The rule also covers any change to a contract that leaves a customer significantly worse off.

The changes came into force on Thursday.

'Fairer deal'

The 65-day statutory deadline was supposed to be in place so people were made aware prices had changed, rather than having to study their bills.

After notice was given, customers had 20 days to switch supplier if they wanted to avoid paying the increased price. Under the new rules, they can now do this before the rise comes into effect.

"Ofgem is determined to ensure that supply companies play it straight with consumers. Giving customers advance warning of price rises is one way of ensuring a fairer deal for them," said Andrew Wright, Ofgem's senior partner for markets.

Campaigners said that the move was overdue.

"It is absurd that providers have been able to announce price rises retrospectively," said Mark Todd, director of energyhelpline.com.

"Imagine going to a supermarket and being charged £90 for groceries and then being told three months later that actually the price was £100 and that they now wanted an extra £10. There would be uproar."

Hannah Mummery, of watchdog Consumer Focus, said: "The challenge now is for energy firms to deliver the changes needed to make switching work for consumers and give them confidence that they are being asked to pay a fair price. The regulator must keep the pressure on until they do."

Industry view

Energy UK, which represents the major UK suppliers, said customers were already getting advance notice of changes, before the rules came into effect.

"In the last six months, the leading energy companies have all provided advance notice to customers of their price changes, going beyond the legal requirement at the time," said Energy UK director Christine McGourty.

"A priority now is to ensure that mailings to millions of homes can be managed effectively to ensure the best possible service for customers."

The Liberal Democrats first raised the issue of the 65-day rule in January 2010, and the Labour government then vowed to reduce the delay to 10 days. The coalition government said it would change the rules after coming into power. However, the regulator went further than any of the parties suggested.

Following a recent review of the UK energy market, Ofgem told energy firms they must offer simpler tariffs to help consumers compare prices.

The regulator said that customers were "bamboozled" by a complex system of tariffs, which have increased from 180 to more than 300 since 2008.

 

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  • rate this
    +4

    Comment number 77.

    I know of no other product you buy without being told the price up front. You don't walk into Tesco, take a tin of beans, use them, and then two months later get told how much they were.
    Utilities such as water and energy should never - never - have been privatized, it was never going to work only the already rich have benefited.

  • rate this
    +1

    Comment number 70.

    The only really fair way of making an assessment of anyone's energy charges is for the Regulator to make ALL energy companies increase or decrease their charges on the same day and then a fair comparison can be made area by area. Currently all I know is that I am being robbed blind and the Energy Regulator is just tinkering at the edges of the problem.

  • rate this
    +3

    Comment number 49.

    This is just regulatory flim-flam. The form of the bill distracts from the content of the price-hike. If ofgem could put a brake on the companies profiteering that might be a reason for celebration but this is just micro-managing the deckchairs on the Titanic.

  • rate this
    +2

    Comment number 31.

    At least this new rule will give people time to see if there's a cheaper tariff or supplier before their prices go up, and you can even write to your supplier to reject their price rise. Then you have time to see if there's something cheaper, and your supplier can't raise your prices in the meantime - you couldn't do that if they told you it had already happened!

  • rate this
    +3

    Comment number 21.

    To combat the high cost of gas we bought a wood burner and have seen a significant drop in our gas usage. I'm just waiting on the drop being queried by our supplier.

    However, I don't see what difference the notifcation period will make as the rise will be implemented regardless and the public will have no say in the matter. The most recent investigation into prices has gone nowhere as usual.

 

Comments 5 of 7

 

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