Energy Customers In For The Long Haul And Curtail Switching
THERE is annoyance to be found in the way health clubs tie you in to long-term contracts.
You’re paying for the use of their facilities, so surely you should be able to quit whenever you like – usually when you realise that you can only be bothered to go once a fortnight. Now energy companies have been given the green light to impose their own long-term contracts on us.
Regulating body Ofgem’s decision to remove the rule that ties a customer to an energy supplier for just four weeks has, not surprisingly, lead to fears that the big six energy providers will impose scary year-long minimum contracts on their customers.
Ofgem claim the restrictions have been removed in an effort to encourage the power companies to step up the introduction of energy efficiency measures and smart meters in their customers’ homes.
Said an Ofgem spokesman: “We see this as a very positive thing for consumers. We consulted widely on this issue and all the interested parties have agreed that its removal will stimulate future investment in energy efficiency measures.”
However, Joe Malinowski of switching website TheEnergyShop.com, is, understandably, unimpressed. Says he: “Everyone’s in favour of more energy efficiency measurers, but equally there’s now nothing to stop the power companies making all new customers sign up for a minimum of 12 months – regardless of whether they agree to such measures or not. Ofgem said this will increase competition but this could backfire on the regulator if it allows prices to stay high and reduces the number of people switching suppliers.”
Expect the energy companies to start cashing in straight away.
Posted: 2nd, August 2007 | In: Money Comment | TrackBack | Permalink
