Ofgem announced reforms to improve customer service, effective December 2023, according to an analysis of Warm This Winter Tariff Watch reports published by the End Fuel Poverty Coalition1. The same analysis lists the reform among six recommendations from reports published during 2023 and 2024 that have been implemented by Ofgem, alongside a further nine proposals that have not been acted on1.
The implemented measures include a levelling charge balancing standing charges between prepayment meter and direct debit customers, a review of wholesale energy allowances that concluded there were no systematic differences in costs, and a revision of the EBIT allowance to include both fixed and variable components1. Ofgem also set conditions for prepayment meter installations, effective November 8, 2023, although the analysis states these did not go far enough in addressing the concerns of all campaigners, and the Market Stabilisation Charge expired on March 31, 20241.
"Ofgem announced reforms to improve customer service, effective December 2023"
Among the proposals not acted on, the analysis states that Ofgem has not implemented measures to cap exit fees or improve their transparency, has not improved transparency or provided detailed breakdowns and machine-readable data formats for distribution network operator and gas network costs, and has not implemented a dynamic framework for line losses1. It adds that Ofgem has acknowledged the issue of gas network decommissioning costs but has not detailed specific steps to manage them, and has not outlined specific actions to scrutinise gas network ownership against national security and ethical standards1.
The analysis gives figures on costs to households. It states that standing charge reforms could reduce annual charges by £152.06, a 46% fall from £334.08 a year to £183.021. It states that exit fees on energy bills have increased by 345% in the last three years, that around three million UK households have opted for fixed energy tariffs, and that the majority have exit fees of more than £1001. A snapshot taken in April 2024 found that 76% of fixed tariffs have annual costs above the Ofgem price cap, and the cost of the gas network has surged 38%1.
| Measure | Status given in the analysis |
|---|---|
| Consumer service standards reforms | Announced, effective December 20231 |
| Prepayment meter installation conditions | Set, effective November 8, 20231 |
| Market Stabilisation Charge | Expired March 31, 20241 |
| Cap on exit fees | Not implemented1 |
| Transparency in network cost calculations | Not improved1 |
| Dynamic framework for line losses | Not implemented1 |
Why it matters for households
The reforms described cover how suppliers handle customer service and when prepayment meters can be installed, both of which affect how a household deals with its supplier when something goes wrong. The analysis places these alongside unresolved items that bear directly on what a home pays: exit fees that determine the cost of leaving a fixed tariff early, standing charges that are paid regardless of how much energy is used, and network costs built into bills1. For a household weighing a fixed tariff against a variable one, the level of the exit fee and whether the tariff's annual cost sits above or below the price cap are the figures the analysis highlights1. The transparency items concern whether households and their advisers can see breakdowns of the network costs included in bills1.
What happens next
The analysis states that delivering the standing charge changes would require changes to Ofgem regulations and government funding, as well as action to protect low income and high usage households such as those relying on energy for medical needs1. It states that Ofgem has closed its call for input on standing charges but that no further steps have been taken to move adjustment allowances, headroom allowances, profit allowances, payment uplift and levelling costs entirely to the unit rate section of the bill, and that while the Labour Party indicated a willingness to broadly address standing charges in its manifesto, no concrete steps have been taken to move policy costs from standing charges to general taxation1. No dates for further Ofgem decisions on the nine unaddressed proposals have been reported1.
Households wanting to understand the regulator's remit can read our guide to Ofgem, and those in dispute with a supplier can read about energy complaints and redress.
Sources1 cited
- Ministers urged to review nine nightmare energy rules, endfuelpoverty.org.uk