Ofgem Proposes End to Npower’s Switching Trial

By : Business Save |April 17, 2019 |Energy Blog |0 Comment

Ofgem Proposes End to Npower’s Switching Trial

The UK energy industry regulator Ofgem has proposed an end to the provisional order imposed on supplier Npower last November.

The provisional order was introduced to force the supplier to co-operate with Ofgem’s Active Choice Collective Switch Autumn Trial. However, the energy supplier’s reluctant conduct throughout the trial has left Ofgem disappointed.

Court Injunction for Consumer Engagement Trial

The trial intended to help 100,000 Npower customers that were on expensive default deals for three years or more. A previous trial discovered more than one in five disengaged customers made average savings of £300 per year by switching. Npower initially refused, allowing only 50,000 of its default deal customers to take part in the collective switching trial. This caused Ofgem to seek and obtain a high court injunction to force Npower to fully co-operate.

Npower eventually did fully comply, although not before causing unnecessary delays and providing what was cited as ‘incomplete information’. This is also not the first time Ofgem have found Npower’s conduct unseemly.

Ofgem ‘Remains Disappointed’ with Npower’s Conduct

Ofgem have made it clear that they ‘remain disappointed’ at Npower’s behaviour during the Active Choice Collective Switch Autumn Trial.

A spokesperson for the energy industry regulator said, “This was the first occasion where a regulated entity refused to comply with a statutory order issued by the Authority, requiring the Authority to initiate enforcement proceedings in court. While the Authority respects the right of regulated entities to challenge its decisions, such challenges must be brought in the appropriate forum at the appropriate time.

“It is unacceptable to challenge a regulatory obligation by way of refusal to comply with it and the Authority makes clear that it will not hesitate to deal robustly with such conduct in future.”

Ofgem have made it clear that they are satisfied that the switching trial order is no longer required. Thus they have proposed to revoke it, although they will accept responses to the proposal up until mid-April this year.

Ofgem’s Switching Trial Proves Successful

While the full results won’t be published until the summer, the trial has been declared a resounding success by Ofgem. Several thousand consumers that were on expensive default tariffs chose to switch to cheaper deals thanks to the trial. In addition, the trial has provided a lot of useful information and insight that will inform Ofgem’s future policy decisions.

Ofgem said of their previous switching trial, conducted between February and April 2018:

“Our headline results from the trial have shown that 22.4% of customers in the trial switched overall. Customers who switched to a new tariff averaged savings of around £300. Of these, approximately half chose the collective switch tariff.”

The previous trial also discovered that almost a quarter of customers who switched either to the collective switch tariff or to other more beneficial deals were over 75 years old.

To learn more about different energy suppliers and tariffs, contact Business Save and their team of highly experienced energy experts.

 

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