Unfair Practices in the UK Electricity Market

An In-Depth Analysis of Supplier Conduct and Regulatory Shortcomings

Prepared by: Irshad Akhtar BuzzEV

Date: March 2, 2025

Executive Summary

The UK electricity market has undergone a tumultuous period in recent years, with energy suppliers often accused of engaging in unfair practices. From delayed export tariff payments to inflated direct debits, and slow price reductions despite falling wholesale costs, consumers have been left at a disadvantage. Major providers—both legacy and newer entrants—have exhibited systemic issues in billing accuracy, debt handling, and complaint resolution.

This report consolidates data from various sources, including Ofgem, the Energy Ombudsman, consumer watchdogs, media investigations, and firsthand accounts. The findings reveal:

1. Delayed Export Tariff Payments: Prosumers often wait months for payments under the Feed-in Tariff (FiT) or Smart Export Guarantee (SEG) schemes, whereas suppliers promptly bill for import tariffs.
2. Inflated Direct Debits: Companies exploit smart meters to maintain or increase monthly payments, allowing them to remain cash-positive at the expense of their customers.
3. Slow Price Reductions: Prices “rocket” in response to higher wholesale costs but fall slowly once costs decline, a phenomenon exacerbated by the opaque practice of supplier hedging.
4. Complaints and Resolution Times: Despite new entrants like Octopus garnering praise for customer service, complaint volumes remain high. Large suppliers often have the highest complaint rates and slower resolution times.
5. Weak Regulatory Oversight: Ofgem’s response has been criticized as reactive, with its oversight described in Parliamentary reports as “too slow” and at times insufficient to protect consumers effectively.

Key Recommendations

• Timely Payment Enforcement: Impose strict deadlines for export tariff payments and automatic compensation for delays.
• Ring-Fencing Customer Credits: Mandate that suppliers hold customer balances in trust, proactively refunding surpluses above a set threshold.
• Tariff Structure Overhaul: Review price-cap methodology, cap standing charges, and consider social tariffs to protect vulnerable customers.
• Strengthen Complaints Framework: Shorten complaint resolution windows, empower the Ombudsman to enforce binding resolutions faster, and heavily fine chronic offenders.
• Proactive Regulation and Transparency: Implement tighter financial stress testing for suppliers, audit complaint handling, and enforce standard reporting of direct debit and credit balance data.

With these reforms, the UK electricity market can shift towards a fairer, more transparent system that restores consumer confidence and ensures sustainable energy provision.

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