Energy tariffs to be Simplified under Ofgem Announcement

UK Electricity Tariffs to be simplified: Ofgem

by Jarrah Harburn on October 19, 2012

Ofgem have announced plans today to reform the complicated energy and gas tariff rates that have plagued home and business owners in the UK for years. Under the proposals, energy retailers will be forced to inform their customers in simple, transparent fashion about the cheapest tariffs available.

Current Energy Tariffs Complicated

At present, energy retailers such as British Gas, Npower and Scottish and Southern Energy use notoriously complicated methods when relaying to their customers their charges and fees. Seemingly endless tariff options based on time of day usage and location allowances confuse and mask the true rates that are applicable. Ofgem’s plans are designed to alleviate this stress and ambiguity to help consumers make savings on their bills in a straightforward manner.

Proposed Tariff Changes

The energy regulator has outlined that the number of core tariffs available for each fuel type will be four. Also, all tariffs will have to be detailed as a standing charge and a single unit price. The complex multi-tier tariff rates will be banned and dual fuel discounts will be considered separately as a stand alone option.

PM’s Pledge to Offer Lowest Tariff Rates

The move comes in the wake of Prime Minister David Cameron’s statement this week that he would put into place directives that retailers would have to offer their lowest tariff rates to their customers. Seen as being somewhat short-sighted by the Energy Minister and possibly a contribution to higher rates for all, this move was muffled out by the end of the week but Ofgem stress their actions are completely independent. In an Ofgem statement they highlighted their actions to be in the interest of consumers and the greater simplification of charges and tariffs, not politically motivated.

Ultimately it means lower energy tariffs should be a closer reality for millions of consumers confused by the current approach. If this helps consumers to save money on their bills, whilst keeping retailers and brown energy suppliers honest then it can only be seen as a positive step.

Written by Jarrah Harburn

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