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| 'Unfair' energy bill ban proposed | |
| (40 minutes later) | |
| Energy companies will be banned from charging "unjustified" prices under new rules proposed by the regulator Ofgem. | Energy companies will be banned from charging "unjustified" prices under new rules proposed by the regulator Ofgem. |
| Prices, including those for pre-payment meters, will have to be "objectively" justifiable under new conditions. | Prices, including those for pre-payment meters, will have to be "objectively" justifiable under new conditions. |
| Ofgem started the investigation in February 2008 after all the leading suppliers imposed big price rises. | Ofgem started the investigation in February 2008 after all the leading suppliers imposed big price rises. |
| It has been looking for evidence of collusion among suppliers and to see if the wholesale markets in which gas and electricity are traded are working. | It has been looking for evidence of collusion among suppliers and to see if the wholesale markets in which gas and electricity are traded are working. |
| 'Emphatic move' | |
| Ofgem had previously said that there was no evidence of collusion between the "big six" suppliers in setting prices. | Ofgem had previously said that there was no evidence of collusion between the "big six" suppliers in setting prices. |
| Under the proposed rules, different payment methods will have to reflect the cost to the supplier of offering those methods. | |
| This could lead to lower prices for consumers using direct debits and higher prices for those on pre-payment. | |
| It will also compel energy companies to provide an annual statement to customers providing details such as the tariff, consumption and a reminder of the customer's right to switch. | |
| "This is an emphatic move by Ofgem to clear the decks of obstacles that prevent consumers from getting access to the best offers," said chief executive Alistair Buchanan. | |
| The regulator will publish a draft of the new licensing condition next month and consult with energy suppliers, with the aim to implement them by the autumn. | |
| If they cannot agree, Ofgem said it retains the right to refer the matter to the Competition Commission. | |
| Price cuts | |
| Ofgem announced last year that it would be conducting a quarterly review of the link between wholesale prices and domestic bills. | |
| It concluded earlier this month there was no evidence of collusion between suppliers in setting prices. | |
| Ofgem also stressed that there was no evidence that suppliers passed on increasing wholesale costs to customers, but then failed to drop prices when costs fell. | |
| This month, energy supplier Npower is to cut electricity prices for UK households, the last of the "big six" energy companies to announce a reduction in either gas or electricity bills for customers this year. |