CMA intervention will ‘destroy competition’: Utilita

The intervention into the energy market by the Competition and Markets Authority (CMA) will be the “destruction of competition”, according to new entrant Utilita Energy.

The supplier’s chief executive William Bullen said he was “incredibly disappointed” with the CMA, and accused it of potentially “ruining our business” and causing “irreparable damage to the prepay smart meter market”.

Utilita, which serves only the smart prepay market, has condemned the government for wasting billions of pounds, claiming half of its £11 billion commitment to smart metering “unjustified”.

Bullen said the investigation had “inflicted barely a scratch on the big six” but was punishing the prepay market.

“The prepay market is being punished when credit market customers – where differential pricing is a major problem – need at least as much protection,” he said.

The CMA is currently accepting responses to its provisional findings. The final remedies from its investigation are expected in June 2016.

In December, the CMA said that technical limitations of prepayment meters limit suppliers’ ability to innovate and offer suitable tariffs to these customers. It stated that prepayment meters “give rise to a number of detrimental effects on customers”, who face higher costs than those on other tariffs.

The industry is divided over whether smart prepayment meters should be rolled out ahead of other smart meters, as recommended by the CMA, with the Data and Communications Company warning that prioritising prepayment meters would delay the rollout and force it to revisit its strategy.

Ecotricity, Ovo Energy and Co-operative Energy, on the other hand, have welcomed the idea, saying prepayment customers should receive the benefits of smart metering as soon as possible.