Ofgem’s Retail Market Review (RMR) was launched in 2010 to make the energy market simpler, clearer and fairer for customers. It includes a number of new requirements for suppliers that started coming into effect a few months ago – with more to come until spring 2015.
Ofgem launched the RMR in 2010 due to concerns the energy market wasn’t working effectively for consumers. Many people found it confusing and frustrating. So much so, that around 50% of people hadn’t switched supplier since the electricity industry was deregulated in the 1990s and they were put onto a tariff with their regional supplier.
The first set of changes came into effect in October 2013 and further changes will continue until March 2015.
We always strive to make things simple, fair and clear for our customers – but we’re still obliged to comply with the RMR changes.
Since August 2013 suppliers have been required to produce and follow binding Standards of Conduct that require them to treat customers in a ‘fair, honest, transparent, appropriate and professional manner.’ And we’re required to produce and publish a Treating Customers Fairly statement online each year.
From 31 December 2013 a number of changes were made to tariffs – mainly how many tariffs can be offered and how they’re structured.
All tariffs must consist of a standing charge and single unit rate to make them easier to compare.
Many suppliers were charging long-standing customers more than new customers to subsidise attractive discounts for people signing up. Ofgem decided to protect these customers from being charged more. Suppliers must now move customers on dead tariffs – tariffs no longer open to new customers – onto their cheapest non-fixed tariff.
We already treat all of our customers the same, no matter when they join us or how they pay – and because everyone already pays our latest best price this change hasn’t affected us.
Ofgem has capped the total number of tariffs suppliers can offer to four (per fuel and per meter type) to make things simpler.
Cash discounts are now banned, with three exceptions:
Non-cash discounts (e.g. vouchers) are still allowed.
Ofgem will introduce the Tariff Comparison Rate (TCR) to make it easier for customers to compare their tariffs across the market in a similar way to the annual percentage rate (APR) the financial industry uses for credit cards and loans.
You can visit our What is the Tariff Comparison Rate? page to find out more.
Because so many customers have never switched suppliers Ofgem wants to remind people, via each bill and annual statement that they can switch. From 31 March 2014 all of our bills and annual statements will include a new section called ‘Could you pay less?’