Ofgem calls for more transparency after assessment of energy suppliers’ accounts

01/02/2012

The energy watchdog Ofgem has called for a number of reforms to increase transparency in the market following an independent review of energy suppliers' accounts by advisory firm BDO LLP.

Following its probe in 2008, Ofgem requires companies to publish energy accounts each year which demonstrate their profitability of generation and supply.

Due to a number of account adjustments in the first full set of accounts, which covered 2009, the watchdog enlisted BDO to carry out an independent review and hoped that this would help them to make bills and annual statements easier for consumers to understand.

BDO has found that the annual statements provided by energy firms are broadly fair and appropriate with the official numbers they have published, but has recommended several changes in the way the statements are prepared to improve transparency.

Alistair Buchanan, chief executive of Ofgem said that the findings of BDO's report should offer consumers a degree of reassurance and further reforms will make the financial information much clearer in the future.

"Suppliers now need to build on this report and make the radical changes needed to restore consumer trust in energy suppliers," he added.

"The real win for consumers will be when suppliers provide consumers with simple tariffs and clearer bills and annual statements as proposed by Ofgem.

"There are clear signs that some suppliers are alive to this challenge and we are looking for full engagement by all suppliers with our reform package."

As part of this process of reform, Ofgem is proposing new simpler tariffs and clearer price increase notifications.

Indeed, a recent survey conducted by Npower found more than 90 per cent of businesses believe that buying reasonably-priced energy is too complicated and time-consuming and called on suppliers to provide tools which will make the process simpler and more transparent.

Posted by Emma Noble