12.03.10 Ofgem to review loophole in energy price notifications

There is a current loophole in the law that means energy companies only have to inform their customers of a price rise in their energy bills up to 65 days after the rise has been introduced. Now the government wants Ofgem, the industry regulator, to close this loophole and impose a new and more reasonable limit.

The issue was originally brought up by Simon Hughes, the energy spokesman for the Liberal Democrats. He highlighted how unfair it was that energy companies could effectively put up their prices without informing consumers.

A number of possible solutions are currently being considered. One is to force the suppliers to inform their customers before any increases are confirmed. Another is to introduce a much shorter deadline of only a few days rather than the current 65 days.

Joan Ruddock, the Energy and Climate Change Minister, said that price hikes “are difficult at the best of times”, but that some people might not find out for up to 65 days is “utterly unacceptable”. The government has now given its assurance that the 65-day rule will be changed in favour of consumers, despite the fact that energy suppliers could veto any decision that is made.

The energy industry has hit back at the claims, however, with Christine McGourty from Energy UK stating that the majority of customers are advised about any changes to their energy prices “within weeks”, and that the 65-day rule gave companies the means to communicate in the “most cost-effective way - via their bill”.

Despite this, the fact that some people are only informed of price rises up to two months later is clearly a practice that will have to end.

« Go Back to Main Blog