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Energy: Prices

Energy and Climate Change written question – answered on 24th November 2011.

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Photo of Alex Cunningham Alex Cunningham Labour, Stockton North

To ask the Secretary of State for Energy and Climate Change

(1) if he will take steps to prevent energy companies offering heavily discounted deals only to new customers;

(2) what recent discussions he has had with major energy companies on their pricing policies.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

DECC Ministers and officials regularly meet with the Regulator and energy suppliers to discuss a range of market issues.

Following their Probe in 2008, Ofgem introduced new rules to prohibit undue discrimination and to ensure cost reflective pricing between payment methods. In order to allow suppliers to compete for new customers, these rules allow suppliers to offer time limited, introductory tariffs.

It is important that existing customers are not disadvantaged if suppliers are cross-subsidising loss leader deals to attract new customers by charging existing customers higher prices and it is also vital that customers can move to the lowest tariff consistent with their needs, which should save them money. We have therefore asked Ofgem to look into this issue.

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