‘Retail market review’ or RMR isn’t the kind of phrase to make you jump up and take notice, but it should.
If they are adopted Ofgem’s proposals will fundamentally change the way your energy bill looks, and in turn how you interact with your energy company.
What’s more it’s right around the corner. Ofgem plans to start rolling out the results of its consultation in the coming summer. So what does it consist of?
The biggest change that RMR will bring is also the most well-known: a limit on the number of tariffs each supplier can offer.
This received a lot of coverage at the time when it was announced and for good reason: having four ‘core’ tariffs, including one variable and one fixed, should stop the endless proliferation of new tariffs.
But the RMR will also change the nature of those tariffs. For starters there will be no more two-tier tariffs which charge you a different rate up to a certain consumption level. What’s more, the supplier you’re with will have to tell you about their cheapest deal.
And finally your supplier won’t be allowed to keep you on any ‘dead’ tariffs: more expensive tariffs that aren’t open to new customers.
Ofgem’s proposals also include changing your energy bills. In future your supplier will be required to provide a basic summary box on the front containing all the basic details like your tariff name, what type of tariff it is, payment method, exit fees etc…
However, along with your normal bills you will also receive an annual statement making sure you understand your tariff properly and have considered switching.
Your energy supplier will also be required to notify you in advance of any tariff changes before they impact you, and they’ll have to let you know when your current contract is coming to an end and what will happen if you don’t act.
When’s it coming?
Some suppliers have already started implementing some of these proposals with British Gas rolling out its new bills last year for example, but Ofgem hopes to have its proposals fulled rolled out by next summer.
For a full summary of the RMR and examples of what your new bill might look like see Ofgem’s summary.