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The Government and Ofgem Must Sort This Mess Out by Forcing Energy Companies to Present Their Prices in a Clear, Simple Way

23/04/2013 08:42 BST | Updated 22/06/2013 10:12 BST

Six months ago David Cameron stood up in the House of Commons and made a bold commitment that took everyone by surprise.

After yet another round of inflation busting price rises by the big energy companies, he promised to intervene and legislate so that energy companies have to give the lowest tariff to their customers.

Today the energy regulator, Ofgem, closes its consultation on these plans. But our new analysis has shown that unless these proposals are improved, more than 3.4 million households could end up paying over the odds for their energy as they still struggle to identify the cheapest energy tariffs.

Ofgem claims to have a solution with its new 'Tariff Comparison Rate'. But this APR-style metric will only tell customers the representative price for a medium user of both gas and electricity.

Given only a quarter of British households actually use this level of energy, that leaves three quarters of people making price comparisons based on the wrong numbers.

And that could leave millions opting for an unnecessarily expensive energy deal, resulting in people collectively paying an extra £55million on their bills.

For years consumers have had to deal with ridiculously complex and confusing energy prices and tariffs, with nine out of ten people unable to work out the cheapest tariff in our own investigation. Most of us have never switched supplier, while for those that have switched the confusing way energy is priced has led to many choosing the wrong deal.

With escalating energy prices remaining a top financial problem for households we hoped the government and Ofgem would sort this mess out by forcing all energy companies to present their prices in a clear, simple way and to make it much easier to switch.

While it's good they've told companies to reduce the number of tariffs they offer, their plans don't tackle the barriers to switching. As a result it's likely customers will be put on the best of a limited choice of deals with their current supplier, rather than being able to find the best possible deal across the energy market.

That's why Which? wants the government to step in and legislate to require single unit prices for each energy tariff, in the same way that petrol prices are displayed on the garage forecourt, so that people can easily compare between suppliers to find the cheapest possible deal for them.

It should also make a new rule that suppliers must take no more than a week to switch customers, instead of the current slow shambles that often puts potential switchers off.

This could finally inject much-needed competition into the broken energy market, firmly putting the consumer in the driving seat.

But for that to happen we need a regulator that really listens to consumers. Don't hold your breath.