Better energy deal for Scunthorpe area households unveiled

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Wednesday, November 21, 2012
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This is Scunthorpe

Energy companies will only be able to offer four tariffs for both gas and electricity, under plans unveiled by the Government yesterday.

In a bid to ensure a better deal for customers, Energy Secretary Edward Davey announced a raft of proposals open for consultation until January 2013.

  1. Bill

    Energy suppliers will only be able to offer four tariffs and "dead tariffs" will be banned

But what are the plans about, and how will customers be affected?

The plans

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Under the proposals:

- Suppliers will be only be able to offer four “core tariffs” per fuel. These core tariffs will be required to contain one standard variable rate tariff and one fixed term fixed price tariff.

Suppliers will also be required to offer a single price for each of the four tariff types. “As Ofgem set out, this requirement would not prohibit discounts for dual fuel or lower cost payment methods,” the Department of Energy and Climate Change said.

- “Dead” tariffs will be banned

Why the need for these changes?

As it stands, many customers struggle to decipher their bill and work out if they are on the cheapest tariff available.

The huge number of tariffs on offer from different providers can make shopping around confusing, so many customers don’t bother to switch.

The Government hopes to resolve this by simplifying tariffs and thereby helping to ensure customers get the best deal.

Limiting suppliers to offering four “core tariffs” per fuel will ensure these two tariff types, which account for 85 per cent of all customers, are clear, simple and easy to compare, the Government claims.

And by banning “dead” tariffs, the Government hopes to ensure customers are not left behind on poor value, out-of-date tariffs.

Announcing the plans today, Energy Secretary Edward Davey said: “I am determined to ensure all consumers get a better deal on their energy bill and get the cheapest tariff they can.

“Bill payers will no longer face the impossible choice between hundreds of tariffs; each customer will have a maximum of four tariffs for gas or electricity per supplier to consider.

“And households will have personalised information from their supplier on their bills about the cheapest tariff the supplier offers for their payment method and the cheapest tariff overall.

“For too long people have been stuck on the wrong type of energy tariff, paying more than they need to. Our new proposals will make things much clearer and easier to understand, so that bill payers can get the best deal and feel the benefit in their pockets.”

When does the Government hope to bring in these changes?

The Government wants all customers to have been placed on the cheapest price available from their supplier for the tariff type of their choice as quickly as possible and, at the latest, by summer 2014.

Ofgem's plans to simplify energy tariffs: Q&A

Government proposals to ensure a better deal for energy consumers

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  • Profile image for IT_MAN

    by IT_MAN

    Wednesday, November 21 2012, 8:00PM

    “It will be a real rip off, 4 tarrifs, fixed, variable, prepayment meter and economy 7, that's four, not much good if you want to choose fixed price/term tarrifs as there would only be one so people could not plan ahead to lock into best deals. I was shocked when I noticed Direct Debit cheapest, Prepayment Meter next then Quarterly Bills are most expensive tarrifs, looks like others are subsidising Prepayment Meters which are the most expensive to provide, expensive meters and having to produce the key/cards, then shops selling them will get a cut.
    Should work out bills for 3 bed semi's, divide by kWh's used to get average kWh cost then use that for all kWh's used instead of the two tier tarrif. This would be cheaper for poor and low users, stay about the same for average users but a bit dearer for high users (call it Geen Tax for producing more CO2). Cameron first stated one with standing charge but that would be expensive for low users and old/poor people as they raise it in price increases to hit the poor. I have done checks on every increase and the less you use the higher the percentage on increase, the higher user you are the lower the percentage of increase, weighted if fave of high users/wasters.
    They can deliver, meter and take credit cards for payment for petrol/diesel at same price for each litre so why not the same for gas and electricity, it would make it harder for them to fiddle us with average percentage increase, an 8% increase would be the same for every one. They could still offer all tarrifs so people can choose they best offer for them and best payment method. They could still offer discounts for Monthly Direct Debit, Dual Fuel, Online Tarrifs and loyalty discount if you stay with same supplier for a given time. This way every one could read their meter and know what each digit on meter has cost them so easier to budget, to calculate gas kWh per meter unit it is clearly set out on rear of bill.
    Maybe the goverment and power suppliers should offer some form of education to teach people how to read their meters and understand their bills, it's simple once you have it explained to you.
    They should teach kids at shhool how to do it then they can teach parents and grandparents.”

  • Profile image for ricardo121

    by ricardo121

    Wednesday, November 21 2012, 6:59PM

    “what percentage is added to utility bills to account for theft/non payment?”

  • Profile image for Sparks2400

    by Sparks2400

    Wednesday, November 21 2012, 6:36PM

    “JohnJohn2011,
    RWE nPower, Eon, EDF, Scottish and Southern Electric, Drax Group and Centrica.
    How many of these companies are British owned and, pray tell, how you would wrest ownership off the foreign companies in order to nationalise them?”

  • Profile image for JohnJohn2011

    by JohnJohn2011

    Wednesday, November 21 2012, 2:50PM

    “Apparently the government says a single person can survive on just over £70.00 a week and pay all bills except council tax and rent / mortgage interest. However most MP's blow well over £100 a day on expenses, the grub and coffee bill will be near to £50.”

  • Profile image for englander61

    by englander61

    Wednesday, November 21 2012, 2:41PM

    “JohnJohn2011, Full support on this one , Take it all back into public sector gas , electric , water , All privatization has done has bled the working classes . Can anyone tell me how privatization has help this country,What benefit has it given us ??? Bigger bills”

  • Profile image for SisterWendy9

    by SisterWendy9

    Wednesday, November 21 2012, 2:28PM

    “A crazy idea, people who are already on good tariffs will end up paying a lot more to subsidise those who can't be bothered to switch.

    Nothing for pre-payment customers either, they pay far too much considering they can't get into debt.

    Most companies have a social tariff that they don't advertise. eg Scottish Power have one for pensioners on a low income, it tracks their lowest tariff. ie It always matches their lowest available tariff and is checked daily. The other companies have similar products but don't like to tell us.”

  • Profile image for JohnJohn2011

    by JohnJohn2011

    Wednesday, November 21 2012, 12:59PM

    “All utilities should be back under state (our) control, the system today is obviously a rip off for the general public and small business alike. If you take the time to look you should be able to find out what you are paying for gas per cubic meter or electricity per kilowatt hour compared to the other suppliers. Also why can't the charges be set at one price for kwh & cm used instead of a higher & lower level which makes it more expensive for the for the person that uses less energy. I appreciate that the energy provider (private or people owned) have to make a profit that enables re-investment in the infrastructure, the question is what is the correct level of profit. It really should be very simple, as a supplier you should be able to sell at cost plus government imposed maximum that only allows for re-investment only and not share holders over seas.”

  • Profile image for HattyTood

    by HattyTood

    Wednesday, November 21 2012, 12:35PM

    “Baths Hall during a slow week ?”

  • Profile image for mallyg1

    by mallyg1

    Wednesday, November 21 2012, 12:28PM

    “Who has an electric bill for £10,676. ?”

  • Profile image for englander61

    by englander61

    Wednesday, November 21 2012, 11:12AM

    “Seems like another ripoff , Should never have been privatized same pipes cables yet different tariffs price for units should be set by government , But no its about people with investments . When it was nationalized owned by the state it was fine we all paid the same .”

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