Ofgem rebuffs suppliers over customer transfers

17 January, 2002
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17 January 2002 | Robin Parker

Energy suppliers have received a setback in their attempts to stop customers changing their electricity company.

After unanimous objections from industrial and consumer user groups, energy regulator Ofgem ruled that a proposed change to official electricity supply transfer rules would harm competition and be against customers' interests.

Suppliers asked for the master registration agreement to be modified last October to permit them to prevent industrial and commercial customer transfers on the grounds of breach of contract. In a letter to customer and industry bodies, the regulator called for suppliers and buyers to talk through their problems as they do under current rules.

Ian Dobson, chairman of the CIPS energy committee, welcomed the decision.

"When buyers wish to change supplier, it is done positively and with good reason," he said. "Most industrial buyers make a conscious effort to change supplier and don't want any extra interference."

Suppliers had argued that the rules needed changing to ensure that single sites within a large industrial customer's estate did not inadvertently change supplier without permission from their head office.

But Hugh Conway, chairman of the Major Energy Users' Council's electricity group, said this should be a problem for the customer, not the supplier.

"Customers should not allow themselves to be in that situation," he said. "Contractual problems need to be dealt with on an individual basis."

The measure would also have brought electricity in line with the gas market in which, according to Ofgem, some customers have complained they are locked unfairly into arrangements with their existing suppliers.

Dobson said the rules would continue to constrict the gas market. "The procedure is just an extra hurdle to overcome and that affects customers wanting to change," he said.

"Objections create many problems because there is a lot of wrong data on files, and that creates extra work for buyers."

SMjan2002





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