Wednesday 14 February 2018
Ofgem moves ahead with next day switching plans
Ofgem is moving ahead with a programme that allows people to switch energy suppliers by the end of the next working day.
It is introducing a package of reforms called ‘RP2a’, which will require the Data Communications Company (DCC) to procure a new Centralised Switching Service (CSS) that will facilitate “reliable and fast switching” across gas and electricity markets.
The switching functionality that currently exists in separate gas and electricity services would be replaced with the single CSS - which will be responsible for making sure meter points are accurately matched to premises addresses from an authoritative database.
The regulator said gas and electricity switching processes “will be harmonised where appropriate”.
For gas, suppliers are to initiate a switch, rather than shippers as is currently the case. Should a supplier wish to object to a switch, primarily due to customer debt, they will have until 5pm the next working day to do so for a domestic customer and until 5pm on the second working day for a non-domestic customer.
Switching currently takes on average two to three weeks, which compared to other markets is “slow and out-of-date”.
Ofgem aims to introduce one day switching from mid-2019 and has set out details to allow industry stakeholders to understand what changes they will need to make to their systems and processes and to plan for these changes.
Chief Executive Dermot Nolan said: “There’s long been a perception that switching is a hassle and unreliable. Worse, that the anticipated savings consumers will make from switching won’t come to fruition.
"The current switching arrangements were largely designed for a more analogue age. But the advent of smart meters, half-hourly settlement, price caps and more fundamental changes to the energy system itself, means the time is right to reform the switching arrangements too.”
The government recently announced it is considering sharing details of people receiving certain state benefits with suppliers to protect them from high energy bills. That will enable Ofgem to cap the bills of those households, along with five million other vulnerable customers who are on the “safeguard tariff”.
