The CMA identified three broad categories of remedies:

The CMA’s remedies are intended to make it easier for consumers and micro-businesses to switch to more competitively priced energy tariffs. According to the CMA, approximately 70% of domestic customers of the "big six" are on the most expensive default standard variable tariff (SVT). In particular, the CMA’s analysis revealed that, in total, customers may have been paying an estimated £1.4 billion a year more than they would in a competitive market.

In its provisional findings, published on 7 July 2015, the CMA identified a range of concerns that impede competition in the retail market, including widespread consumer disengagement, regulatory inadequacies and a need for greater transparency. In particular, the CMA cited the following as creating an adverse effect on competition: a lack of awareness of what deals are available; confusing and inaccurate bills; and the real and perceived difficulties of changing suppliers.

The CMA therefore proposed a suite of measures to address its concerns, including:

In the wholesale sector, the CMA’s provisional findings identified two areas in which competition in the wholesale market does not operate effectively:

For CFDs, the CMA recommends that DECC undertakes and consults on a clear and rigorous impact assessment before either awarding a CFD outside of the competitive auction process or before allocating technologies to particular pots (that is, to the portion of funding available within a particular auction) and the CFD budget to those different pots.

For transmission losses, the CMA suggests introducing locational charging to improve the accuracy with which the avoidable costs of variable transmission losses are borne by those that cause them. The CMA intends to implement the remedy by imposing a requirement on National Grid, as system operator, to calculate imbalance charges taking into account transmission losses calculated on the basis of location.

The CMA’s remedies package also includes a reset to clarify and recalibrate the relationship between DECC, Ofgem and the industry. The proposals concern five areas: Ofgem’s duties and responsibilities; the relationship between DECC and Ofgem; the analysis of the effects of policy and regulation; the regime for financial reporting; and governance of the industry codes.

To address these concerns, the CMA recommends:

Whether or not the CMA’s remedies sufficiently address the problems hindering competition is up for debate. While some commentators have suggested that the retail remedies package does not go far enough, others have suggested it is, in some respects, a step too far.

It is arguable that the protection afforded by the temporary price cap should be extended to benefit all SVT customers, not just those with prepayment meters. This view was expressed at the end of the CMA’s report in Martin Cave’s statement of dissent, noting that a short-term price cap covering a substantially larger number of customers would be required to reset the market. Indeed, it is possible that the price cap may lead to suppliers targeting prepayment customers with the new SMETS 2 meters in order to circumvent the price cap. Similarly, taking on the new SMETS 2 meters may be less palatable to prepayment customers in case they lose the benefit of the price cap.

The CMA has also introduced an additional regulatory burden. While the CMA’s intentions behind the proposal to develop a database of disengaged customers are admirable, they also increase the onus on both Ofgem and suppliers to ensure compliance with data protection legislation.

On 11 July 2016, the CMA published an implementation timetable for the remedies set out in the final report (https://assets.publishing.service.gov.uk/media/578366d7e5274a0da3000152/energy-remedies-case-timetable.pdf).

The timetable involves a combination of orders, undertakings from companies and recommendations to DECC and Ofgem. The remedies must be implemented by 23 December 2016. The CMA will consult on the pre-payment meter price cap and locational losses orders in August 2016, and will consult on all the other orders in September 2016. The CMA also intends to consult formally on all orders and undertakings in October 2016.

The final report is available at https://assets.publishing.service.gov.uk/media/576d3f15e5274a0da9000092/energy_market_final_report.pdf.