Ofgem hasn’t tackled tariffs just yet

I’ve had enough. Most people I speak to about our ‘tackle tariffs’ campaign agree that energy tariffs need to be simplified across the board. So why do Ofgem’s reforms only deal with a small part of the problem?

The Retail Market Review – words that might have the effect of sleeping pills on some people, but today they got me out of bed, wide awake, at 5am.

Why? Well, we’ve been campaigning against unfair and confusing energy tariffs since the end of September. We think that customers are easily confused and misled by complicated discounts, tiered tariff systems, and a whole host of gimmicks that make the cost of your energy almost impossible to work out.

How should a simple tariff system work?

Over 6,500 people emailed Ofgem to call for a simple tariff system, and the Retail Market Review, released today, was supposed to provide a solution. We’d been hoping that Ofgem would recommend a simple system for all energy tariffs – meaning you can compare prices at a glance and pick the cheapest deal for you.

But, as with energy tariffs themselves, it’s not quite that simple. Ofgem has proposed simpler tariffs (hooray!) but only for one type of energy tariff – the standard one.

This means that companies would have to offer a nice, easy-to-compare tariff for each different payment type, but they can still throw loads of other confusing deals into the mix. So you won’t really be able to compare everything.

It also means, depending on the ‘innovative’ deals they offer, that low energy users could still end up being penalised by paying significantly higher rates for their first energy units.

To me, this reform only deals with a small part of the problem – it’s like tidying your bedroom by sweeping most of the mess under the bed.

How do we fix this?

But there is some light at the end of the tunnel – at Which? we don’t give up that easily. The proposals are out for consultation for the next 12 weeks, so there’s time to make the change that’s so desperately needed.

Ofgem, although it’s making some headway, hasn’t fully taken our tariff suggestions on board. So we’re asking the government to step in. You can help us by calling for Chris Huhne to tackle tariffs. Sign the pledge below if you’re fed up with tariff deals that leave you bewildered:

In the meantime, tell us about your experiences with this issue – have you ever tried to work out the cost of your energy? When we started this campaign I tested myself by going through my bill and trying to work out if the amount I was paying was correct. I *think* I got it right in the end, but it took me over an hour and a fairly complicated spreadsheet to be certain.

Comments

sam gray says:

2 December 2011

My mother lives an independent life & is 92 and I have asked energy supply companies to put her on their Social??? tarriff which is supposed to be their cheapest> I still cannot work out from all the various tarriffs shown whether she is or is not

IanH says:

3 December 2011

Sam,
Have a look at
http://www.consumerfocus.org.uk/get-advice/energy/households/energy-tariffs-explained/social-tariffs
Lot of helpful stuff there,

Simple has some attractions but so does fair. A simple tax system might have a fixed rate on all earnings. Few would think it fair as the well off would pay much reduced tax and the less well of pay more. Asking people if they want a simple tariff system is not helpful; ask if they want a fair or a simple system. And no, not both!

If you have a competitive market then you should expect a range of offers and deals. It’s the way a market works and supermarkets and train operators epitomise the practice. It’s part of competition and generally works well. Some regulation is needed, but beware the heavy hand.

In this environment customers need to be wise and there’s lots of help around from Comparison sites and Which. I really don’t think this is an issue; there are more important things.

Beryl Metcalf says:

8 December 2011

One of the worst aspects of this whole siutation is that energy companies do not publish their tariff prices and structure and one is at the mercy of comparison sites where suppliers pay for inclusion. So you never know if you have had a oproper comparison. Just insisting that all prices charged are published would help. What other commodity will not tell you what they are charging?

David from Chesterfi says:

13 December 2011

My wife and I have just received our bill from npower for the recent Quarter. It was more than 50% higher than the same Quarter last year. The supplier told us that “there has been a price change…” A classic euphemism! kWh usage for the first Day & Night rates was increased from 42 to 139 hours & 25 to 187 hours respectively. The knock-on effect has resulted in adding more than £50 to our bill, compared with the same Quarter last year.
Npower has been awarded the Crystal Mark for clarity. I have no idea why.
This is only the beginning! I have emailed my complaints to Npower & copied to OfGem, Plain English Campaign, and Which?
David from Chesterfield

PS With regard to the note below the space to Post a Comment, you can be bored with, & bored by. You cannot be bored of!