Ofgem has announced a proposal to change compensation rules which could see customers get more money if they are impacted by issues when switching energy suppliers.
Under this new proposal, the amount someone would get if they have not been switched to their desired new supplier within five days would be raised from £30 to £40.
The energy regulator published a consultation which outlined plans to raise compensation payments firms must pay if they fail to meet the Guaranteed Standards of Performance (GSoP).
Energy suppliers are legally required to pay customers £30 if they do not meet the minimum standards outlined in the regulations.
These standards include making and keeping appointments, investigating and fixing credit or prepayment meter faults, and facilitating switching between suppliers within five working days.
According to Ofgem, a £10 increase would bring the GSoP in line with inflation since it was originally set in 2015.
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Ofgem has announced potential changes to compensation rules which could benefit customers
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Beth Martin, the director of Consumer Protection and Competition at Ofgem, outlined why the regulator considers this hike to be essential in protecting consumers.
Martin said: "We’re working hard to drive up standards in the energy sector, and have introduced a series of reforms to make sure energy companies are doing everything they can to support their customers.
“The guaranteed standards of performance were brought in to make sure consumers get the service they deserve from their energy supplier, but we know things do go wrong from time to time. When that happens, consumers should be compensated fairly.
“With the cost of living increasing across the board, it’s right that we look again at the payment level to make sure this reflects inflation. "
This consultation from Ofgem comes after a series of the regulator's reforms to improve customers service standards within the energy industry.
These include the introduction of faster compensation payments when a supplier fails to complete a customer switch.
Changes to the compensation rules first came into effect last month.
Furthermore, Ofgem rolled out a number of new rules last December to help house.
This included the requirement of suppliers to prioritise enquiries from vulnerable customers.
As well as this, energy suppliers were told to proactively offer support to those who may be struggling to make payments.
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Energy bills have been on the rise in recent years PAIn 2023, Ofgem ordered three suppliers, E.On Next, Good Energy and Octopus Energy, to pay a total of £8million in compensation.
These suppliers were also told to redress after failing to meet the GSoP related to billing, and timely compensation payments.
Households have been saddled with sky-high energy bills over the last two year in the wake of the cost of living crisis.
While energy prices have dropped with the price cap, Ofgem has reminded energy suppliers to take action to protect low-income customers.