Game changer; 3 day switching process introduced to energy industry to tackle competition levels
An agreement has been reached between energy companies and regulators which will enable customers to switch energy supplier within three days. The measure is set for official implementation by the end of the year, with the development expected to raise the efficiency of the provision of energy to customers across the UK.
Currently, the switching process can last up to five weeks, including the two-week cancellation process. This reality has been much criticised for its convoluted format and the current process has been derided and campaigned against vigorously by various consumer groups.
Executive director of consumer group 'Which?', Richard Lloyd, has heralded the reformatory move as a step in the right direction to raising competition levels within the industry and organically bringing down the prices consumers pay for their energy provisions.
Mr Lloyd said: ìFaster, easier switching would be welcome news for consumers trying to find a better energy deal.î
The issue of competitiveness has been heavily scrutinised by policymakers and consumers groups alike in recent times with the problem coming to the boil last winter when all of the countryís ëbig sixí energy providers chose to instigate heavy price hikes on their customers bills.
Energy providers blamed the severity of their price hikes on the green levies that the government was imposing on them, arguing that they were then forced to pass on the added costs of supplying energy to their customers.
The government was eventually forced to accept this allegation, and the green levies were subsequently revoked and providers revised their valuations of the price hikes they applied to customer bills.
However, questions still remained about the energy industry as a whole, with numerous factions calling for competition levels to be raised in order to organically bring down the costs of energy being charged by suppliers and break the stranglehold on provisions that the so called ëbig sixí have enjoyed for too long now.
This simplification is seen by many as the first step to the abolishment of the red tape which is strangling customers in the energy switching process. Lloyd believes that suppliers ought to establish 24-hour switching with swiftness, so that consumer costs remain as affordable as possible.
Underlining Which's? commitment to improving the quality of service afforded to customers, Lloyd specifies the need for suppliers to initiate a simple pricing scheme, which would allow customers to immediately identify the best deal available to them before they switch.
This sentiment is echoed by Ann Robinson, director of consumer policy at uSwitch.com, who expressed the need for customers to interlock cohesively with suppliers, describing the new measure as 'a game changer'
"With half of households yet to switch their energy supplier, it is clear there are barriers that need to be broken down. For many of these, it will be a question of confidence and fear of the unknown. However, measures such as those outlined today should improve this and provide people with greater reassurance."
Those involved with the burgeoning independent supply sector will welcome the change, seeing it as a necessary step on the path to breaking the monopoly the 'big six' power companies, such as British Gas and SSE, hold on the energy supply market.
Through enhancing consumer choice, reducing red tape and maintaining an enduring commitment to improving efficiency, Ofgem intends to provide a 24 hour switching system by 2018.
Dermot Nolan, Ofgem's chief executive, states that "Consumers can change their bank in seven days, their mobile phone in just a couple, but have to wait significantly longer to switch their energy supplier."