OFGEM urged to stop dithering and simplify energy prices
The Energy Advice Line has urged Ofgem to “stop dithering” and reform the UK’s energy pricing system to help bewildered home owners and business electricity consumers alike secure the cheapest deals and demanded the energy regulator amend its proposed reforms to simplify energy pricing even further.
This follows a report by lobby group Which?, which showed the UK’s system of energy tariffs was a major obstacle to consumers finding the cheapest deals on the market. It found more than 109 tariffs and 75 different standing charges in a single region of the UK alone, ranging from no standing charge to £402 a year for gas and electricity deals.
The cold weather is on its way, energy prices are rising, consumers are struggling with the cost of living, and organisations like the Energy Advice Line have long been calling for action on the energy pricing system. It is time for OFGEM to stop dithering.
Energy prices are set to rise with winter on it’s way
OFGEM’s plans’ for an APR-style system for energy pricing is not good enough and could make the situation even more confusing for energy users.
Suppliers need to devise a single method that can be used industry-wide so that consumers can compare what they are actually paying against what they would actually be paying with a competitor if they switch.
The APR-style system is a fairly meaningless to individual consumers because it is based on average electricity use. If consumers are not in a position to make informed choices about their energy they can’t be sure they are paying a fair price for their energy, and in many cases, they won’t be.
As well as calling for Business Comparison to display simple tariffs in the style of petrol prices on service station forecourts, Which? urged Energy secretary Ed Davey to intervene to scrap standing charges.
However, OFGEM claims its proposed energy business electricity prices reforms will mark the end of complex tariffs and see the introduction of a simple pricing structure of a standing charge and unit rate. Until the energy pricing system was overhauled, it was more important than ever for consumers to use an independent and reputable price comparison and switching service like the Energy Advice Line.
It is very difficult for consumers to compare energy prices like-for-like because there are literally hundreds from which to choose but at the same time, it is essential that consumers regularly shop around to ensure they are always paying the fairest possible price for their gas and electricity.
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