Energy regulator Ofgem has today announced plans designed to shake-up the market for British consumers by forcing the "big six" utility companies to publish the prices at which they buy and sell electricity up to two years in advance.
Together, British Gas, E.ON, SSE, Npower, EDF and ScottishPower account for 80 per cent of the electricity generated in the UK, giving them an extremely dominant position in the market.
"Ofgem's proposals will break the stranglehold of the big six in the retail market and create a more level playing field for independent suppliers," said Andrew Wright, senior partner for markets at Ofgem, “…who will get a fair deal when they want to buy and sell power up to two years ahead."
The proposals are the regulator’s attempts to provide more price transparency in the long term futures market, which has traditionally limited sales to smaller energy suppliers, only allowing them to purchase energy in the near-term spot market.
By requiring the "big six" to publish their long term prices and not allowing them to refuse reasonable requests by smaller suppliers to buy energy, it is hoped that the proposals will make it easier for new entrants to take on the established players and ultimately improve price transparency for customers.
“An increased role ...for independent suppliers and generators is precisely what will help drive the competition that delivers better value for consumers and businesses," said energy secretary Ed Davey.
This latest move follows other recent measures by Ofgem to improve the energy market, such as its efforts to reduce the number of complex offers advertised by utility companies and forcing them to offer consumers the best available tariff.
Often accused by the British public of charging inflated prices and being responsible for appalling customer service, the "big six" have long been a source of much rancor for consumers, when in fact a recent study has found that British households pay below-average prices for their electricity compared with other consumers elsewhere in the EU.
Despite this, once a reputation has taken hold among the population, it is very hard to shake, so these reforms will undoubtedly be welcomed by householders up and down the country.