Ofgem shows its teeth again.

UK Energy regulator Ofgem will fine the UK utility company Npower (owned by the German utility company RWE) two million pounds for mishandling customer complaints.
It appears that an investigation found that Npower complaint handling was inadequate and that in particular it had failed those customers whose complaints were not resolved satisfactorily. In the UK there are Complaint handling regulations covering the treatment which domestic and some business energy customers should expect from their energy suppliers should they find it necessary to raise a complaint.  Ofgem appear to have determined that Npower failed in its duties to these customers where they did not provide details on how to proceed. In in particular did not provide details of the services offered by the Energy Ombudsman. Ofgem have said that they believe Npower has now addressed all these concerns.

This comes barely three months after the regulator fined British Gas the country's biggest household energy supplier, 2.5 million pounds for similar breaches and comes with a warning that EDF is also performing poorly in this regard and action against these may be imminent.

It is easy to see this, particularly when it is portrayed as such, as a Government victory for the consumer against greedy energy companies and it may be true in some cases. There has been a heap of talk about the big six operating much like a cartel and the proposed solution is to widen the market and increase competition. But lets not forget that the energy companies are also in a difficult position.

These companies are required to provide a range of services to suit a range of customer budgets and tastes and are required to market them in a manner that befits their nature as commercial enterprises. To do anything else would find them operating inefficiently which in the current climate they would not do for long. Where they are successful and are showing profits they are vilified in a way reminiscent of bankers.

Cork Monkey feels that the battle lines are drawn in the wrong place. More companies entering the market would not increase competition for long – before long there would be buyouts and takeovers, lawyers and stockbrokers would make a mint and it is difficult to see how prices and quality of service would head in the appropriate directions.

Perhaps we need to decide if something that affects this many people is the sort of thing that should be delivered by companies or be controlled by the state and live with the consequences of whatever decisions are taken.

CM