COMMONS

Consumer Engagement with Energy Markets

09 February 2012

The Energy and Climate Change Committee, chaired by Tim Yeo MP, is today launching an inquiry to investigate the way in which consumers engage with energy markets.

The UK’s energy system will need to undergo significant changes in the next few years in order to deliver secure, clean and affordable energy in future.  Consumers will have a vital role to play in determining the success (or otherwise) of many of the policies and measures that will deliver these aims.

This inquiry aims to investigate the extent to which consumers are willing to actively participate in markets (for example by switching their provider) and whether consumers are equipped with the right skills and knowledge to take full advantage of schemes such as the Green Deal and smart meter roll out.  The Committee will also examine the factors that affect public perceptions of energy prices and explore whether better consumer education is needed as our energy system enters a period of significant change.

Terms of Reference

The Committee will examine the extent to which consumers interact with energy markets and whether greater engagement will be needed to facilitate the successful implementation of energy policies and programmes. The Committee invites responses addressing some or all of the following questions:

  • How "energy literate" are consumers in the UK?  For example, are most consumers aware of how much their bills vary according to usage?  Are terms such as "kWh" understood by most consumers? 
  • To what extent are consumers aware of the different components that make up their energy bills and the relative contribution of each aspect? (e.g. wholesale costs, transmission and distribution charges, environmental/social policies and VAT)
  • To what extent are consumers aware of the future projected levels of energy prices and bills and the drivers behind this?
  • What are the barriers to consumers switching energy provider? Will Ofgem’s proposed Retail Market Reform measures encourage behaviour change amongst consumers or are further actions necessary?
  • Will Ofgem’s proposals (including on standard tariffs and greater transparency of information published by energy companies) help to increase public trust in energy companies?
  • To what extent are consumers aware of policies such as the Green Deal, smart meter roll out and Ofgem’s Retail Market Reform that could affect the way they use energy in their homes and their engagement in the market?  And what are their perceptions of the schemes?
  • What are the potential implications of a lack of consumer awareness in these areas?
  • Is greater consumer education needed and if so, who should take responsibility for this, who should deliver it and how should it be delivered?
  • What impact does the media have on public perceptions of energy bills?
  • What are the pros and cons of using levies on bills rather than general taxation to pay for environmental and social policies?

The deadline for the submission of written evidence is 9 March 2012

Notes on the submission of written evidence

  • Written evidence should be in Word or rich text format-please do not use PDF format-and sent by e-mail to [email protected].
  • The body of the e-mail must include a contact name, telephone number and postal address and should make it clear who the submission is from.
  • Hard copy submissions should be sent to: The Clerk, Energy and Climate Change Committee, 7 Millbank, London, SW1P 3JA.
  • The deadline is 9 March 2012.

As a guideline submissions should be no longer than 3000 words. However, please contact the Committee staff if you wish to discuss this matter.

Submissions should be in the format of a self-contained memorandum. Paragraphs should be numbered for ease of reference, and the document should, if possible, include an executive summary.

Submissions should be original work, not previously published or circulated elsewhere. Once submitted, your submission becomes the property of the Committee and no public use should be made of it unless you have first obtained permission from the Clerk of the Committee. Please bear in mind that Committees are not able to investigate individual cases.

The Committee normally, though not always, chooses to publish the written evidence it receives, either by printing the evidence, publishing it on the internet or by making it publicly available through the Parliamentary Archives. If there is any information you believe to be sensitive you should highlight it and explain what harm you believe would result from its disclosure; the Committee will take this into account in deciding whether to publish or further disclose the evidence.

For data protection purposes, it would be helpful if individuals wishing to submit written evidence send their contact details in a covering letter. You should be aware that there may be circumstances in which the House of Commons will be required to communicate information to third parties on request, in order to comply with its obligations under the Freedom of Information Act 2000.

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