Gauging the transparency of a power supplier

A big shift took place in Japan’s electricity market on April 1: the retail electricity market was “liberalised”, allowing residential consumers to choose their power supplier for the first time. Almost 820,000 chose to switch their power supplier in the first five weeks after the move was allowed. The top two utilities saw the highest churn: Tokyo Electric Power Company (Tepco) lost about two per cent of its 29 million customers, while the client count at Kansai Electric was down 1.4 per cent.

In the UK, the ability to switch power supplier has been there, but the process was so onerous that the government stepped in to make it easier for customers to switch and save money. This was done by asking energy suppliers to make the tariffs clearer, and by funding a helpline for offering switching advice. Energy rate comparison sites often cite accreditation from the local regulator, Ofgem.

Both these examples show how governments and regulators are working to squeeze efficiencies out of a system that was historically considered a natural monopoly. In the rest of the world too, utilities are finding that they need to offer a compelling proposition to keep their customers, and customers are finding a voice.

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