Ofgem and consumer bodies pow-wow on price cap

Regulator will take its plans to companies soon

Ofgem has met with consumer bodies to discuss the possible shape of its safeguard tariff to protect consumers from what government has described as “abusive” billing.

The energy regulator the met with a group of consumer representatives yesterday, to debate precisely which customer groups should be eligible for the tariff, and how it might be structured.

The meeting followed an announcement a fortnight ago that Ofgem was drawing up plans to protect vulnerable customers, while encouraging greater engagement in other parts of the market.

The regulator made a preliminary suggestion that a safeguard tariff might be extended to customers who are eligible for the warm homes discount, a move which the statutory consumer champion for the energy sector, Citizens Advice, has long advocated.

Speaking after summit with consumer bodies yesterday, Rachel Fletcher, Ofgem’s senior partner for consumers and competition, said discussions had been “productive”.

“We are considering a range of options, including a safeguard tariff for vulnerable customers,” she said, adding that the regulator will take proposals to energy companies for their feedback “soon”.

“We will continue to gather evidence over the summer and will formally consult on our proposals shortly afterwards.”

Fletcher vowed that Ofgem remains “committed to taking prompt action” to protect vulnerable customers during a transition to a “smarter, more competitive market”.

Ofgem was asked to set out proposals for fixing energy market failings by energy secretary Greg Clark after the recent general election.

Clark has insisted he remains ready to legislate for the introduction of an energy price cap if Ofgem’s proposals for market intervention are not seen to be bold enough.

The regulator’s announcement two weeks ago that it will consider options for a safeguard tariff also included plans to encourage greater engagement and transparency acorss the energy market.

Following yesterday’s meeting, Fletcher said: “We are also continuing our work to help all consumers, particularly those on poor value standard value deals, get a better deal.”