Energy UK asks MPs to back better price cap appeal rights

Energy UK has urged MPs to allow suppliers better appeal rights on the proposed energy price cap for default tariffs.

In a letter to the Business Energy and Industrial Strategy (BEIS) committee, which after it became public yesterday was later published online, the trade body said it is concerned about the regulator’s intention to exclusively use the judicial review route for appeals.

It said Ofgem should also include the option for suppliers to appeal via the Competition and Markets Authority (CMA).

The regulator has claimed that using judicial review for appeals is more appropriate in the case of the price cap, due to the complexity of the issues involved.

In its own letter to the BEIS committee last week, it argued that it is common practice to use judicial review to bring effective scrutiny to appeals, it also pointed out that CMA appeals can be lengthy, and might upset the current timeline for bringing a default tariff cap into effect by Christmas this year.

But Energy UK, which represents a range of UK energy retailers including all members of the big six, said including the option of a CMA referral is about “good governance”. It also claimed that appealing via the Competition Markets Authority (CMA) would be a “fairer, faster and more effective method” for dealing with supplier concerns about the cap, than using the judicial review process.

Yesterday, an Energy UK spokesperson added that a CMA appeal route should be allowed in the interests of consistency with other price controls in the energy sector and other utilities.

It feared being unable to refer Ofgem’s decision to an independent body such as the CMA, which would have six months to determine an appeal against price control decisions, could set a dangerous precedent in economic regulation, affecting both consumers and competition.

Energy UK’s comments add to the concerns expressed by suppliers in their responses to a pre-legislative consultation on the cap late last year. Eon and EDF Energy both wrote to the BEIS committee at that time, to advocate the inclusion of a CMA appeal route.

Some small suppliers claim, however, that such calls from the big six and Energy UK are aimed at delaying a price cap which they fear could damage their retail businesses.

Responding to Energy UK’s letter, Greg Jackson, CEO of Octopus Energy said: “Instead of spending hundreds of thousands of pounds of their customers’ money trying to wriggle out of the energy price cap, the big six could be investing that money in bringing an end to rip-off prices for their most loyal customers.

“It’s clear that the big energy companies can’t be trusted to reform their predatory practices. It’s time for a big shake up, and we welcome the Government’s legislation.”

The CMA have been contacted for comment.