In a surprising prediction, “principles and not prescription” based regulator Ofgem have claimed, despite damning evidence to the contrary, that energy prices will fall in the future.
The leftfield observation was made by Rachel Fletcher, Senior Partner at Ofgem who said:
“There’s room for price cuts and you wouldn’t be expecting [energy] prices to go up”.
Given the market is now running back up at October 2013 levels after a fall in the summer months the very basis of the comment does not ring true.
Added to that with the increasing prevalence of generation subsidy on energy bills, the advent of contracts for difference soon to be upon us and the increasing costs of network upkeep and renewal, Ofgem’s prediction is as wide of the mark as you would expect from an organisation totally insulated from the commercial realities of the world.
The unhelpful comment is just the latest in myth based outbursts from Ofgem and does nobody any favours, least of all the misled consumer.
The wholesale market for energy alone is volatile enough to have a direct on costs that can work in a customer’s favour, but given the average energy price is only made up of around 50% wholesale costs and the rest is far less volatile and largely fixed by region, meter, any market price falls are soon diluted.
Ofgem would be far better advised to “treat their customers fairly” by giving them the simple and sage advice to make the best of the market they are in and contract with foresight and intelligence and not wait for a mythical opportunity and in doing so leaving it too late to strike a deal.
Come on Ofgem you should know better than this.