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.”
- 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.