EDF Energy calls for 'petrol station forecourt' pricing

 
Gas hob EDF Energy compared the idea to a petrol forecourt where there is a single-pricing system for fuel

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One of the UK's biggest energy suppliers has called for single-unit pricing for gas and electricity to help consumers compare tariffs as easily as they currently shop around for petrol.

EDF Energy said it would introduce the system if all other suppliers did too.

The energy regulator Ofgem said the proposed scheme would not be as easy to implement as it might appear.

This was because of the number of payment options and special "dual fuel" packages that currently existed.

A plan by Ofgem to simplify the energy market will be included in the forthcoming Energy Bill.

It will require companies to limit the number of tariffs on offer to four for each of gas and electricity.

But EDF said that plan was still too complicated.

'Simple way'

The French-owned firm called for all companies to set a single-unit price for gas and another for electricity.

Richard Lloyd from Which?: "If we don't have these changes, we'll all just carry on as we are"

It compared the idea to a petrol forecourt, saying it would mean customers could easily spot who was offering the lowest prices for fuel - just as easily as customers who drive between different petrol stations can instantly see where the best prices are offered.

But EDF said it would only implement such a pricing scheme if all the other energy firms followed suit.

Richard Lloyd, executive director of consumer group Which?, said simplifying tariffs would help customers.

"When we've tested prices being presented in this simple way we've found eight in 10 consumers can readily spot the best price for them," he said.

"So the current system is too complicated, the regulator and the government want to simplify the energy market for consumers, and the reforms they're proposing at the moment are still too complex."

Start Quote

People who use more power will end up paying a higher amount”

End Quote Ramsay Dunning Co-operative Energy

Ian Marlee, of Ofgem, said: "What consumers have said to us, and we've researched with thousands of consumers, is that what they want is choice but they also want simplicity.

"What they want is the kind of discounts like a duel fuel discount or paperless billing discounts, that if you really were just to go for a unit rate, those wouldn't be offered."

The UK's largest energy supplier, British Gas, rejected the proposal.

And supplier Co-operative Energy said there would be winners and losers under the system.

"People who use more power will end up paying a higher amount. That's not necessarily a bad thing because, with the drive for energy efficiency, it'll be an additional incentive... to help people bring about energy efficiency. But we need to be very clear that that would be the case," said Ramsay Dunning, the company's general manager.

BBC business correspondent Joe Lynam said normally consumer choice was a good thing but the hundreds of different types of tariffs had left consumers confused.

 

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  • rate this
    +11

    Comment number 39.

    Maybe they will start doing those points/rewards things you used to get in petrol stations ?

    You remember the sort of thing; buy £10,000 of petrol and get a free glass - if you were lucky !

  • rate this
    +27

    Comment number 38.

    At last a good idea from an energy supplier that will remove the machiavellian deals that inhibit price comparison .
    Now if someone can just do the same with other companies i.e Rail ticket prices.
    Ofgem are a toothless inept quango that do no more than wring their hands and offer pitiful reasons why nothing can be done.

  • rate this
    +1

    Comment number 37.

    "When we've tested prices being presented in this simple way we've found eight in 10 consumers can readily spot the best price for them, he said"

    I wonder what it was that the other two missed?

  • rate this
    +5

    Comment number 36.

    I remember YEARS AGO when there were pickets around the petrol stations when the price rocketed from 59p to around 70p......

    Years on...the price is nearly £1.35p per litre and people complain but do nothing! Shows how dumbed down we really are in this country!

  • rate this
    +19

    Comment number 35.

    I split my time between France and UK and use EDF for energy supplies in both countries. Prices in France were limited to 2%-3% price rises on Government instruction. On my return to the UK, my EDF energy tariff was increased by 10.8%! Am I subsidising myself in France, is it connected to the euro crisis or is it blatant profiteering by UK energy suppliers?

    Answers on a postcard, please ...

  • rate this
    +3

    Comment number 34.

    The UK national grid comprises of Power stations,Transmission Lines (and Small Generators). The heart of the first two are 3 to 4 decades old. Hardly any extra capacity had been built in the past 20 years, and the transmission of the power is becoming less efficient as the cables and transformers age. It has been estimated that over £230 billion is required just to bring the system up to date.

  • rate this
    +2

    Comment number 33.

    A cool Spring with few signs of Summer must mean more enegery has been used. They usually wait until Autumn to announce price rises, just in time for 12 hour a day radiator and lights usage.

    They would have to deal with a minor public outcry if they increased prices twice a year so have opted to offer a new tarif structure to increase prices through stealth instead.

    I don't believe a word of it.

  • rate this
    +1

    Comment number 32.

    It will remove much of the financial incentive for smart metering and demand side management as there could no longer be higher rate periods to avoid. This will result in more energy being used in peak periods, power outages and higher rates as suppliers are risk adverse. Instead we need more co-operative buying and roll out of new technology that helps customers easily manage their energy use.

  • rate this
    +2

    Comment number 31.

    I hope this means I would be able to buy a 'tankful' (e.g. 1MWhour) at the advertised price, and when that runs low, fill up again from same supplier or somewhere else... without all the complications of 'switching' etc.

  • rate this
    +1

    Comment number 30.

    They will only find other ways to complicate and confuse people. Though every little helps. British business relies on cheating customers any way it can, so nothing will actually change. They will resort to the new customer offer, then slyly remaindering the account on the worst possible rates, just like banks. Special offers, arcane conditions etc.

  • rate this
    +13

    Comment number 29.

    The price will be this much on a Sunday, if it's raining, and it's your grandmother's birthday. Unless, it's Wednesday afternoon and it's a full moon, then the price will be different. Or it's April and the cows are sitting down, then it will be another price.

    Isn't that how energy tariffs work ?

  • Comment number 28.

    All this user's posts have been removed.Why?

  • rate this
    +23

    Comment number 27.

    "Ofgem said the proposed scheme would not be as easy to implement as it might appear."

    Ofgem - you are a bunch of inept idiots, go and learn pricing techniques from any local supermarket

  • rate this
    +5

    Comment number 26.

    Price obfuscation has always been part of the retail game so people don't even realise they're being ripped off.

  • rate this
    0

    Comment number 25.

    I decided I was sick of all this, so switched to the COOP for my energy. They have (wait for it) a single tariff, are open and clear on this and yesterday I received my profit share back. So don't wait for legislation or these companies to change, you change. Energy is going to go up in price, but you can join an ethical company and be happy at least

  • rate this
    +7

    Comment number 24.

    In the past we paid a standing charge plus units paid, that was said to be unfair to low users as the standing charge was greater than the fuel used. So the companies hid the charge in the first x amount of fuel consumed, everyone went for that because it looked cheaper.
    What we should be demanding is a single unit price and no standing charge. Why should we pay for the companies measurement kit

  • rate this
    +3

    Comment number 23.

    I change every year & do find cheaper rates (It's all relative as prices continue to go up across the board). If the providers limit the tariffs to 1 or 2 then it will be their most expensive ones, so limiting consumer choice. If this is the case you may as well just have 1 set price for gas & 1 price for elec. whoever the supplier is. That's a nice simple way of screwing us all, all of the time

  • rate this
    +3

    Comment number 22.

    No chance this will happen...the energy companies want to milk the customer for as much as possible and complicated tariffs are part of the milking process.

  • rate this
    +1

    Comment number 21.

    What about linking the price of gas, electric, petrol etc to the company share price, profit, wages and bonus of their top ten earners, everytime these go up the price of their gas, electric and petrol drop by the same percentage!

  • rate this
    +1

    Comment number 20.

    Wow... a turkey voting for xmas

 

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