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(Bloomberg) — UK energy suppliers and consumer-protection groups are urging the regulator to maintain a ban on cheaper tariffs for new customers that was introduced during the energy crisis to help stabilize the market.
Energy regulator Ofgem is proposing lifting the ban in October, saying that it would deliver greater savings and service to consumers. But companies including Octopus Energy Ltd. and EON SE are against the move, arguing that it’s unfair to loyal customers, especially those in vulnerable financial positions who are less likely or unable to switch suppliers.
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In the past, many new suppliers would offer unprofitably low prices to attract customers. This was part of what led to more than two dozen companies going bust during the energy crisis. The cheaper deals — known as acquisition-only tariffs — were subsequently banned by Ofgem as part of efforts to create a more stable customer base.
“Our very recent history shows the flaws in encouraging below-cost unsustainable acquisition only deals by some which contributed to over 30 suppliers going bust,” the group wrote in a letter to Ofgem Chair Mark McAllister, opposing the proposed move.
Recent polling and research by So Energy showed that most members of parliament and energy customers are against Ofgem’s proposal.
So Energy Chief Executive Officer Simon Oscroft said it’s a “scandal” that suppliers may soon be able to hide the best deals from loyal customers. Electricite de France SA said acquisition tariffs hit the elderly and disabled the hardest.
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