As part of that analysis the agency ordered Scottish Power pay £750,000 ($1.25 million) towards a public awareness campaign to rectify failing to justify a significant gap between charges for direct debit and standard credit accounts.
Sarah Harrison, Ofgem’s senior partner in charge of enforcement says, “Suppliers need to clearly justify the different prices they set for different payment methods. In this instance, Scottish Power did not have a robust process in place when setting their prices to ensure that the difference between their tariffs complied with Ofgem’s rules.”
Gillian Guy, Citizens Advice chief executive, observed to Utility Week, “People on lower incomes are struggling to meet extortionately high energy costs, brought about in part by energy firms’ failure to provide real choice for people with less money to spend. Any market investigation has to establish whether competition is working for different groups of consumers, not just whether it is working at all.”
In March, Ofgem referred the energy sector for a full Competition and Markets Authority (CMA) investigation after finding competition is not working as well as it could.
E.ON UK chief executive Tony Cocker adds: “We believe there are areas where the market functions well along with other areas where improvements could be made. Therefore it is essential that the CMA investigation is set-up in a way that allows the market as a whole to be properly reviewed. By empowering the CMA to have a strong, clear and focused remit we can take another step along the road towards ensuring clear outcomes and restoring confidence.”