CMA energy market report: positive direction of travel but questions still remain says PwC

Published at 14:12 PM on 10 March 2016

This morning the Competition and Markets Authority (CMA) published its provisional decision on remedies as part of the ongoing Energy Market Investigation.

Stuart Cook, PwC’s Head of Utility Strategy & Regulation, comments on the interventions which aim to increase competition and customer engagement and the impact to operators – and consumers.

“While today’s package of remedies will certainly help increase competition, they are not the fundamental ‘game changer’ many initially anticipated nor are the key proposals a big surprise for operators, with many trailed well in advance.

“But the devil is always in the detail - and this is no different. Further clarity will be needed across a range of areas not least the timetable for implementing the proposed changes and how those customers deemed ‘disengaged’ will respond to the prospect of their confidential data being made available through an Ofgem controlled database to third parties - and react to the potential marketing drive that will follow.

“For operators, many will be questioning the mechanics behind the price cap and if it will be high enough to cover the additional costs of serving the pre-payment meter market. And there are some concerns about the significant dependency the CMA has placed on the anticipated 2020 roll out of smart meters.

“While the measures announced reaffirm the CMA’s belief in the energy market, it also set out a number of challenges and additional responsibilities for the regulator, Ofgem, such as publishing opinions on draft Government legislation and policies, setting the strategic direction for the industry’s rule book in future years and publishing an annual State of the Market report.”

ends

Media contact:

Lynn Hunter, UK media relations

Tel: 0141 355 5015 / Mob: 07841 570487

Email: lynn.m.hunter@uk.pwc.com

 


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