The UK’s Competition and Markets Authority (CMA) has today set out proposals for a package of reforms designed to promote competition in Britain’s energy market, following a wide-ranging two-year investigation into the sector. Frontier Economics has advised SSE, one of the UK’s major energy suppliers, over the course of the CMA’s investigation.
These proposals, which the CMA plans to introduce following the conclusion of its investigation in June, include:
- creating an Ofgem-controlled database, designed to allow rival suppliers to identify and contact customers who have been on their existing supplier’s default tariff for at least three years;
removing regulatory measures that the CMA believes have limited the ability of suppliers to innovate and compete for customer business;
- taking steps to ensure that future regulatory measures around providing information to customers are “road-tested”, where appropriate through Randomised Controlled Trials;
- taking measures to strengthen the ability of price comparison websites and other intermediaries to help customers find the best deals;
- removing restrictions on how suppliers can compete for customers on prepayment meters and certain restricted meters; and
- making the impact on customer bills of future policy measures aiming to support low carbon generation more transparent.
- In addition, the CMA is consulting on a “temporary safeguard” price control for customers on prepayment meters while these reforms are being rolled out. The CMA had previously considered extending this temporary price control to all customers on standard variable tariffs, but is no longer proposing this measure.
Frontier regularly advises clients and regulators on issues related to competition in the energy market.
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