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CMA ruling on energy network appeals is a “good result” for consumers, says Citizens Advice

Citizens Advice, in its role as the official consumer watchdog for energy consumers, has responded to the Competition and Markets Authority’s (CMA) provisional findings on appeals by some energy networks (transmission and gas distribution companies) against their price control, known as RIIO-2.

Citizens Advice submitted evidence to the CMA stating that, if successful, appeals by networks could cost consumers an additional £1.5bn.

James Plunkett, Executive Director of Citizens Advice, said:

“Overall this is a good result for consumers. The CMA’s decision to confirm lower returns is a significant step forward in tackling the excessive profits made by network companies at the expense of their customers. 

“But there remains a fundamental problem with the price control process. Networks have a clear advantage in terms of access to information, which continues to lead to favourable settlements and easily achievable performance targets.

“The CMA’s failure to tackle this means these companies could still make hundreds of millions of pounds in unearned profits, while customers receive nothing additional in return. At a time when so many households are struggling financially, this is deeply unfair.

“The current appeals process is costly, it’s skewed against consumers and is in desperate need of reform. There needs to be better coordination across markets to make sure the process for setting monopoly company profits genuinely delivers value for money for consumers.” 

Additional background

  • Citizens Advice research (Missing Billions - July 2017) showed that energy network companies were able to overcharge energy customers by £7.5bn during the current RIIO-1 price controls.
  • Citizens Advice previously established five principles which it believes need to be met if the RIIO-2 price controls are to deliver for consumers.

Notes to editors

  1. Citizens Advice includes the national charity; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
  2. Citizens Advice is the statutory consumer advocate for energy and post. We provide supplier performance information to consumers and policy analysis to decision makers.
  3. The Citizens Advice Witness Service provides free, independent support for prosecution and defence witnesses in every criminal court in England and Wales.
  4. Citizens Advice offers Pension Wise services at 500 locations in England and Wales.
  5. Citizens Advice’s services are free, independent, confidential and impartial, and available to all regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  6. To get advice online or find your local Citizens Advice, visit citizensadvice.org.uk
  7. For consumer advice, call the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 to talk in Welsh.
  8. We helped 2.6 million people face to face, by phone, email and webchat in 2017-18. For service statistics see our monthly publication Advice trends.
  9. Citizens Advice staff are supported by over 23,000 trained volunteers, working at over 2,500 locations in England and Wales.

Energy Licence Modification Appeals 2021

Original article link: https://www.citizensadvice.org.uk/about-us/about-us1/media/press-releases/cma-ruling-on-energy-network-appeals-is-a-good-result-for-consumers-says-citizens-advice/

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