UK: Energy regulator under fire over price-cap plan

According to the FT pressure is building on regulators to abandon plans to cap prices for some energy consumers, as companies from across the sector unite to oppose the proposals.

The Competition and Markets Authority stunned Britain’s energy suppliers this year when it proposed capping default tariffs, which are usually the most expensive plans available to customers.

Now the CMA has given an indication it is considering rowing back on that suggestion by asking companies to respond to an alternative proposal by two of Britain’s biggest suppliers.

Both Scottish Power and Centrica have suggested that instead of introducing a so-called “safeguard tariff”, the industry should instead ban indefinite tariffs and make households choose a new energy plan each year.

Under their proposal, energy contracts would last a year, after which customers would receive a letter asking them to sign a new contract, as happens in the insurance industry. If they did not choose another plan, customers would be put on a default tariff while being sent repeated reminders to switch.

Full content: The Financial Times

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