Britain's energy regulator has warned gas and electricity suppliers it is keeping a close eye on their activities after a series of tariff hikes left consumers "frustrated and angry".
Ofgem chief executive Andrew Wright made the remarks as the watchdog prepares to publish reforms designed to help independent suppliers compete effectively with the so-called Big Six.
Mr Wright urged companies to use other measures that are already coming into force to simplify tariffs to help restore the damaged trust of consumers in the sector.
In a speech to energy experts, he said the firms should observe “not just the letter of the reforms but the spirit as well”.
He added: “We will be watching suppliers’ actions very closely.”
Earlier this year, it emerged that British Gas customers could be missing out because the firm only told them about its cheapest deals if they had opted to receive advertising materials.
A recent round of inflation-busting price hikes, at a time when household incomes are continuing to feel the squeeze, have created a political storm. Increases so far announced this autumn by British Gas, Scottish Power, npower and SSE have averaged around 9%. Suppliers have blamed wholesale energy costs, network charges and green levies.
Mr Wright said: “Consumers are frustrated and angry that the latest round of price rises have happened at a time when incomes are already being squeezed. Consumer confidence in the energy market is low and suppliers must use our reforms to reach out to consumers and restore trust in the sector. Consumers who have never changed their energy supplier can save up to £200.
“Our reforms are already beginning to kick in as most suppliers are now offering just four tariffs for gas and four for electricity. This will make it far easier for consumers to pick out the best deal for them.
“Our reforms are the best chance for consumers to see immediate benefits through simpler tariffs, clearer information and much more consumer protection.
“The reforms give consumers the choice they value and the simplicity they need, but it is now for suppliers to get behind not just the letter of the reforms but the spirit as well.’’
By the end of this year, all suppliers will be restricted to offering no more than four different tariffs per fuel, followed by clearer information on bills by the end of March 2014, including requirements totell customers about their cheapest deal. Mr Wright said the reforms were beginning to kick in as most companies were now offering just four tariffs for gas and four for electricity, making it “far easier for consumers to pick out the best deal for them”.
Meanwhile, Ofgem is finalising proposals to establish a more level playing field so that smaller suppliers can compete with the Big Six. Last week, Energy Secretary Ed Davey warned that energy companies found to have rigged markets could face criminal penalties.