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Monday, 1 April, 2002, 13:02 GMT 14:02 UK
Energy price controls disappear
plug
Enough competition or 'appalling' decision on price controls?
The UK's energy watchdog on Monday gave up all remaining controls over the cost of electricity and gas bills.

Ofgem has said the level of competition within the industry is sufficient for price controls to be lifted and that it hopes the move will give gas and electricity companies the freedom to cut prices.

The watchdog also said the number of people switching suppliers - including pre-payment customers - showed competition was working.

It said 15 million customers have switched suppliers, with 170,000 changing firms each week.

'Appalled'

But some consumer groups say the ending of price controls could leave less well-off customers paying more.

Energywatch earlier said it was "appalled" at the decision and was worried that customers using pre-payment meters would lose out.

The consumer group's boss Ann Robinson said she had "a real fear that we will see energy suppliers put up prices for this important group of consumers".

Ofgem plans to focus more on monitoring competition.

Little gained

The scrapping of price controls comes less than three months after MPs launched a stinging attack on Ofgem for failing to protect the interests of all domestic electricity customers.

A report by the House of Commons' public accounts committee (PAC) said millions of people could be paying less for their electricity bills, if the regulator made it easier for them to switch supplier.

By June 2000, about 19 million customers had not switched suppliers, even though, together, they could save up to 670m - about 13% of an average yearly bill, the report said.

The report concluded that the majority of consumers had gained little from competition, and said Ofgem had failed to curb high-pressure selling techniques.

Also on Monday, a new regulation came into effect forcing electricity suppliers to increase the amount of electricity they obtained from renewable sources to 10% of their total by 2010.

"This obligation is the corner stone of our policy to unlock the door to green energy in this country," said energy minister Brian Wilson.

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 ON THIS STORY
The BBC's Hywel Jones
"Ofgem scrapped pricecapping"
See also:

15 Feb 02 | Business
Watchdog slams energy price decision
26 Nov 01 | Business
UK lifts energy price controls
04 Oct 01 | Business
Q&A: Switching energy supplier
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