Five questions answered on Ofgem’s energy shake up

Cheap tariffs.

Ofgem are changing their price plans. Photograph: Getty Images

First energy companies increased their prices, now Ofgem has issued plans to change the way energy price plans are laid out and what companies can offer to their customers. We answer five question on the shake up.

What is Ofgem proposing?

To, in Ofgem’s own words, make the energy market: "simpler, clearer and fairer".

How exactly?

By banning energy companies from using complex multi-tier tariffs, by making energy companies offer personalized information to help customers find the right deal and after a period of time transferring customers to the cheapest fuel tariff to reward their loyalty. Ensuring energy companies make duel fuel savings more clear on bills and restrict energy suppliers to using only four tariffs.

Why now?

Ofgem have been researching these proposals for a year. However, the need for simplification in energy tariffs has become more evident after the recent price rises announced by energy companies across the country which has highlighted the fact that consumers are not engaging actively with their energy suppliers, are failing to switch supplier and look for the cheapest tariff for them.

What have Ofgem said?

Ofgem chief executive Alistair Buchanan told the BBC: "Our plans will put an end to consumers being confused by complex tariffs and will usher in a simpler, clearer, fairer and more competitive energy market for all consumers.

"I am glad to say that suppliers have already responded with some initiatives, but these don't go far enough."

When will these regulations come in place?

Ofgem is hoping to enforce the new changes by next summer after a period of further consultation with consumers and energy suppliers. However, Ofgem has said there is nothing stopping energy companies implementing the changes now.