Citizens Advice response to Ofgem’s Call For Input on the development of a competition framework for the domestic retail market
We support the development of clear frameworks through which Ofgem considers consumer interests and effective competition. This should set out how Ofgem expects policy changes to lead to positive outcomes and help identify any risks that need to be mitigated, including where some groups of consumers lose out from changes.
The competition framework relates to domestic customers only, but an adapted version for the non-domestic market may also be useful, especially as the Consumer Interests framework it works alongside is applicable to both domestic and non-domestic consumers.
Given the importance of close working between the regulator and government in policy development, as previously highlighted by the NAO and CMA, Ofgem should be clear that it will use the framework in its public and private engagement as the Government develops policy in relation to the energy market.
It is currently unclear what, if any, regular reporting will replace previous outputs on the state of the market. Ofgem should set out how it will use this framework in order to regularly report, and the key data being used for different indicators should also be provided on an ongoing basis via Ofgem’s data portal.
This competition framework follows a similar one previously developed to support the assessment of conditions for effective competition to support decision-making on extensions of the price cap. Ofgem should more clearly set out the differences between the two frameworks, and why its thinking on competition has developed.