MSE News: Ofgem outlines plans for simpler energy tariffs 1 December 2011 at 1:17PM in Energy 45 replies 4.2K views

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"Ofgem has today published proposals for simpler energy tariffs, in a bid to create a more competitive energy market ..."

Read the full story:

Ofgem outlines plans for simpler energy tariffs

Bark01

Okay so simpler tariffs, thumbs up!

No competition and expensive prices, MASSIVE thumbs down.

Thanks OFGEM.

JimmyTheWig

I may have read this wrong, but there's nothing to say that the "no frills" Ofgem option will be competitive.
They can then complete on, and continue to confuse consumers with, the "innovative" tariffs and nothing will really change, will it?

HappyMJ

The cheapest tariff with a standing charge is £130 more expensive than my tariff. Thanks....

Bark01

JimmyTheWig wrote: »

I may have read this wrong, but there's nothing to say that the "no frills" Ofgem option will be competitive.
They can then complete on, and continue to confuse consumers with, the "innovative" tariffs and nothing will really change, will it?

There are rules that govern non standard tariffs as well such as they all have to be fixed price. This rules out tracker tariffs and variable on-line tariffs.

Variable tariffs are riskier options so usually carry larger discounts.

jalexa

MSE_Helen wrote: »

Firms typically charge two sets of unit prices at present, whereby the first few units you use are more expensive than the rest, but the costs vary wildly. This makes it difficult to compare.

No it doesn't. A Consumer Focus accedited comparison website only requires postcode and annual consumption to provide a list of options in headline price order.

It is non-pricing issues which cause consternation, for example "deferred discount":eek:, "guaranteed discount" and particularly direct debit review calculations over less than a 12 month review period. Yet to read the entire release but any change there?

Most forum posts talk of being billed in £££s, hardly ever kWhrs, though meter readings are proof positive of consumption. Many posts talk of comparing monthly payments. This is not to apportion blame but that is evidence of a massive fail in consumer education.

Simplified comparison and direct dealing with suppliers risks the principle of independent comparison. That will be a consumer disaster. And not good news for MSE.

Pincher

The people who can't work out tier 1 and tier 2 will just moan that they don't know whether to go for low standing charge with high unit rate, or the other way around.

Save us from reactionary regulators who make rules to help the hopeless.

Consumerist

Bark01 wrote: »

There are rules that govern non standard tariffs as well such as they all have to be fixed price. This rules out tracker tariffs and variable on-line tariffs.

According to Ofgem's factsheet 111, released today, tracker-type tariffs will still be allowed.

More innovative tariffs – We propose that all other tariffs must be fixed term with a specified end date and fixed terms and conditions. We propose: [among other things] . . .

• terms and conditions, including the price, are set at the start of the contract and cannot change for the duration of the fixed term contract. (Although price would not be fixed for certain limited tracker-type tariffs).

Bark01

okay, but they are not allowed to track against 'evergreen tariffs' like most of today's tariffs do

MillicentBystander

British Gas have clearly pre-empted the new guidelines by already simplifying their tariff structure and ending the dodgy practice of overcharging their standard tariff punters in order to fund forays to the top of the switching sites with loss leading, short term online only tariffs. I know some people on here believe BG will lose lots of punters but these new enforceable standards of conduct (and in particular the one I've bolded) seem to suggest that the practice will be ended across the Big 6. That line is almost the exact same line BG MD Bentley came out with when he announced the new BG approach to fairness.

Ofgem hopes it new proposals will be backed with enforceable standards of conduct to ensure that:

Suppliers behave in a fair, honest, transparent and professional manner towards consumers.
Information given to consumers is complete, accurate and not misleading and is communicated in plain and intelligible language.
Suppliers do not market products or services which are inappropriate to consumers.
Suppliers act promptly and courteously to put things right for the consumer when things go wrong, and that customer service arrangements are fit for purpose.

Cardew

The problem with a fixed standing charge is that it discriminates against those with very low consumption.

i.e if the standing charge is, say, £100 per year and kWh charge is 10p/kWh someone with an annual consumption of 1,000kWh is paying 20p/kWh whilst someone using 7,000kWh is paying 11.42p/kWh