When I switch to a new energy tariff and get my first bill, shouldn’t I pay the prices I’ve just signed up to? Sadly energy companies don’t think so – there’s no guarantee your prices won’t change just after switching.
It sounds crazy, but unless you’re on a fixed price tariff, energy suppliers have no obligation to bill your gas and electricity at the price originally quoted.
You might sign up to a tariff expecting to pay a certain amount, but by the time the switch has finished, you could find yourself paying more.
How does that work?
It can take up to six weeks for energy companies to switch your gas and electricity. And though this might sound excessive, it takes time for your old supplier to give final readings to your new supplier, and for your new account to be set up.
In the meantime changes in wholesale fuel costs, and any number of other issues, could have a dramatic effect on energy prices. So unless you’ve signed up to a fixed price tariff, there’s nothing to stop your new supplier raising prices in the time between signing up and once the switch has finally taken place.
Exit fees are an extra blow. You’d hope to be given a chance to reject your new supplier’s offer if its energy prices rise during the switch. But no – you may have entered your contract period during this time, meaning you’ll have to pay a hefty exit fee to get out of it.
What’s the alternative?
We’d like the system to work more like phone and broadband. When you sign up to a new phone or internet package, you’re usually told how long your introductory offer will last, and how much the service will cost after that.
This means you can sign on the dotted line safe in the knowledge that your first bill won’t come as a surprise.
What can we do about it?
We’ve been asking Ofgem to change this for years, and there hasn’t been much sign of movement. When we last brought this up on Which? Conversation the consensus was that Ofgem won’t, or can’t, do much about it.
B. Martin said ‘Ofgem do not have the power to introduce radical changes’, while Dave suggested that the only way to make real change was to renationalise the energy market.
But when MPs get back from their Easter holidays they’ll be debating the Energy Bill, which gives us a real chance to drive this issue forward. You can help out by asking your MP to support us in making the Energy Bill more consumer-friendly, including a promise that tariff prices will be guaranteed for 12 weeks after you sign up.
We’d also love to hear your thoughts on the issue, so we can give your examples to the energy companies, Ofgem and the government. Have you been a victim of surprise energy price increases? Does this put you off switching energy providers?