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Jon Slade comments on Ofgem wholesale price concerns
The decision whether or not to reduce customer prices should be based on a transparent set of facts and calculated risks which suppliers, consumers and regulators alike can subscribe to, rather than the current situation where everyone is left wondering whether suppliers are playing fair.
Due to the way in which suppliers systems and business practices are structured, suppliers are often in the dark about whether they can afford to pass on cost reductions to some or all of it’s customers. Most suppliers are forced to review the profitability of their retail business as a whole, because they don’t have a detailed customer-level view supporting long and short term purchasing decisions, or a good understanding of customer level margin.
New technology allows energy suppliers to understand their portfolio at a greater level of detail than ever before, removing the need for the high level approach which is bad for customers and certainly bad for transparency – and it’s within the suppliers’ gift to change.