OFGEM will meet this week to establish the latest update to the quarterly price cap, with energy super-forecasters Cornwall Insight predicting a sharp drop from £3,280 per year to £2,053 per year - meaning a potential 30 per cent plus reduction in household energy bills this summer.
While this is still double pre-energy crisis trading levels of around £1,000-£1,200 per year, it reflects a huge decline in gas prices and easing conditions across
Such a freefall in wholesale costs opens up the prospect of a competitive energy market again where customers are offered cheaper deals from suppliers, with energy firms grappling with each other for customers to grow their base.
It is in this context that the latest wave of Ofgem fines is so disappointing, with the regulatory crackdown exposing a market that cannot be trusted as trading conditions ease.
Last week, Ofgem demanded three suppliers fork out £8m to deal with customer compensation failures - with the guilty energy firms having delayed or failed to make compensation payments for money owed to households.
This egregious behaviour in a cost of living crisis was committed by suppliers across the spectrum, from energy giant Octopus to EON's green division to challenger supplier
EON Next has paid out a total of £5.5m to almost 95,000 customers, while Octopus Energy has forked out approximately £750,000 to 19,000 customers, Meanwhile, almost 350
This outcome was certainly embarrassing for Octopus and EON, two of the
A few days later,
Both
This makes their failures all the more sickening - as it turns what customers should believe to be sincere messaging about improving their green lifestyles into, frankly, little more than weasel words.
PREPAYMENT SCANDAL STILL LOOMS These latest shortcomings from suppliers also come in the midst of the prepayment meter crisis - where
However, the reality is the crisis was industry wide, as suppliers pushed through the forced installation of nearly 100,000 prepayment meters last year - despite record bills.
Ofgem has since required suppliers to sign up to a new code of practice for customers, which includes energy firms having to make at least 10 attempts to contact a customer before installing prepayment meters.
Energy users over the age of 85 without someone else in the home will also be exempt from forced prepayment meters.
Such limits coming into the energy market exposes how poorly suppliers handled prepayment meters during a period of immense vulnerability for households.
It is also worth remembering that the energy crisis pre-dates the
Now, we have been left with a smaller energy market and fewer choices for customers, where 90 per cent of the market is owned by Big Six suppliers - a reality the government and regulator sought to avoid when they liberalised the energy market nearly a decade ago.
Energy firms must be seen as trustworthy to appeal to customers.
So far, Ofgem has been lenient in its cleanup of the sector - and hasn't gone through with imposing policies such as ringfencing requirements for customer balances. It has argued this is because it values innovation and creativity from potential new players in the market.
Energy firms have been lucky up to this point, with the focus of the energy crisis being
(c) 2023 City A.M., source