Should all power suppliers publish their pricing for small businesses?

Should all power suppliers publish their pricing for small businesses?

The investigation by the Competition and Markets Authority into the energy supply market in Great Britain unsurprisingly attracted virtually no attention here. That’s understandable. Most of what was said only applies to a market we don’t participate in and which is run on different principles. Across the water they have fairly unrestricted competition while here domestic customers can rely on a mixture of competition and price regulation.

All the same it does pay to look at these sorts of documents. They have insights which have value. The CMA reveals that small to medium enterprises in GB pay more than is necessary for their power. The report reckons that the excess charges could be as much as £280 million a year. What is fascinating is that the vast bulk of that is paid by microbusinesses - companies which have less than ten employees. They paid £230 million of that £280 million. That’s an awful lot of money which I daresay the firms themselves think would be better off in their own pockets. 

The CMA has proposed that suppliers publish information about pricing for business customers on their websites to improve transparency on costs. Currently in Northern Ireland only Power NI, whose small business tariff is regulated, reveals its pricing. This tariff covers consumption up to 50,000 units of electricity a year. The other suppliers choose not to reveal publicly what they charge. The result is that a typical small business, unless it does a lot of homework or engages an intermediary, does not know whether they could be paying too much.

The CMA proposals do not have to be adopted here but they certainly merit attention by the Energy Regulator. 

I include the reference to the CMA document for your attention

Last updated on 11/05/2016

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