At a time of rising energy prices, Andrew Wright (right), a senior partner at regulator Ofgem, says the body's plans to shake-up the market will help consumers find the best deals to help cut costs.
You need to be sure that when you pay for energy, or shop around for a better deal, the pricing is simple and deals are easy to compare.
During this time of rising prices, it is even more important that consumers have confidence in the way the gas and electricity markets work. Earlier this year, Ofgem put forward sweeping reforms to make energy markets work better for consumers.
There are currently a huge number of different price deals on the market – over 400. But our reforms would sweep away this complexity for the majority of customers – those on standard, open-ended deals. They would reduce the number of deals and make those that remain simple to compare.
This will enable around 75% of customers to choose the best deal by comparing just a single price. And if you don't want to shop around, you'll still know exactly what you're paying for your energy.
Still a choice
But we understand there are consumers who want to shop around and who want more choice. So under our proposals, suppliers will be free to provide innovative deals, provided these are under a contract with fixed terms and conditions and a fixed end date.
This means you will know what you are paying for the whole period of the deal and will not be surprised by unexpected price increases before the deal ends.
Our proposals would also mean that when a fixed deal ends, customers would revert to a standard product unless they make a new positive choice about which new deal to go for. No longer will you be rolled over automatically onto a new contract without your permission.
We're also pressing ahead with our proposals that will help companies enter the market and offer consumers choice. Companies such as First Utility, Ovo, and – most recently – the Coop have all entered the market.
We are proposing to make the large suppliers auction up to 20% of their power so new and smaller companies will find it easier to enter the market and compete for the Big Six's customers.
More information for users
When it comes to consumers having confidence in the market, transparency is key. We are working hard to make sure consumers have enough information about how their bill is made up and the relationship between the price paid for energy by the companies and the price paid by the consumer.
We have forced the large supply companies to disclose their revenues, costs and profits and we're appointing an independent accountancy firm to go through these accounts – to improve further the clarity on the cost of energy and the profits earned.
So far the Big Six energy companies have engaged with us in our proposals for reform. But be assured that if at any point we think our reforms are unlikely to succeed, either because the companies are frustrating them or for any other reason, we will take further action.
If necessary, we will ask the Competition Commission to fully investigate the market.
Views expressed are not necessarily those of MoneySavingExpert.com.