Domestic customers are losing out, the report says

The price suppliers pay for energy has fallen by 40% since 1998, but domestic customers have had their bills reduced by only 1% to 3%, the body said.

The Public Accounts Committee is urging the industry regulator to carry out a new review into whether the market is anti-competitive.

It wants Ofgem to look at suppliers' profits - and cap prices if necessary.

Since the market was opened to competition in 1998, only 40% of domestic consumers have switched supplier, with a lower proportion for the elderly and those who live in rural areas.

Customers who have stayed loyal have benefited much less from competition and pay much more than those who have switched, the report concludes.

Recommendations

The committee wants Ofgem, the industry regulator, and Energywatch, the industry's consumer watchdog, to provide better information about switching supplier.

One idea suggested is to provide better information about switching supplier on customers' bills.

I urge Ofgem... to review whether suppliers are acting anti-competitively, and respond with fines and price caps where necessary Edward Leigh MP

The committee's chairman, Edward Leigh MP, said: "So far, domestic electricity consumers have got a very poor deal".

"Customer loyalty is penalised and, worst of all, potentially vulnerable groups including the elderly are losing out most."

With Ofgem holding very limited information on suppliers' profit margins, he said, the regulator could not be sure that suppliers were "not lining their pockets at consumers' expense".

"I urge Ofgem to raise customer awareness, and review whether suppliers are acting anti-competitively, and respond with fines and price caps where necessary".