Is there a lot of competition in your market? How difficult is it for new entrants to enter the market? What barriers do they face?

UNIT 2 Markets and customers | 21

How do power companies view organizations which look after consumers’ interests? Read this Internet text about Energywatch in the UK and discuss the questions.

Energywatch merged into Consumer Focus

E

nergywatch, the former independent watchdog for gas and electricity

consumers, has been merged into a new organization called Consumer Focus that looks after consumer interests.

Consumer focus is for energy consumers what Greenpeace is for the environment – a campaign group

that champions a better deal for people and promotes innovation for consumer benefit. It takes up complaints on behalf of

consumers and has greater powers than its predecessors. It acts on behalf of vulnerable consumers who may feel exploited by powerful energy companies.

Consumer Focus employs 170 people and has a budget of £15 million. It is able to investigate consumer complaints that it feels will be of benefit to the public at large. It can also demand information from utility companies.

One of its priorities is to tackle the issue of fuel poverty in Britain. Fuel poverty is defined as a household that spends more than ten percent of its income on fuel.

Utility companies are usually quick to pass on rises in fuel costs to their customers

and Consumer Focus estimates that five million British households faced fuel poverty in the winter of 2008. Ed Mayo, the chief executive of Consumer Focus, says, “Customers across the country will

be seriously worried about bills escalating through winter while the regulator (Ofgem) consults with industry. We urge energy companies to take action now by boosting their social tariffs.”

Although there are advantages to having one organization look after all consumer complaints, some people are worried that energy will not always be the priority of such a big organization. “Will Consumer Focus really be able to do anything about what foreign companies charge for fuel?” asked one worried consumer. “Wouldn’t Energywatch have been better at dealing with this kind of specific problem?”

Ed Mayo does not agree. “As one organization, we take a more co-ordinated approach to tackling the issues that affect us all. We are able to engage more effectively with government, business and regulators and we have stronger powers and more teeth.”

 

 

Over to you

• Do you think such a watchdog agency is necessary? Give your reasons.

• How do such organizations influence the overall strategy and policy of energy companies?

• Are energy companies forced by legislation to cap prices in your country? If so, outline how this is done.

• Does the energy industry in your country have an organization which looks after the interests of power companies? If so, how does it do this?