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
    0

    Comment number 59.

    Generate your own and tell 'em where to go.

  • rate this
    +3

    Comment number 58.

    Thank goodness those dreadful publicly-owned energy monopolies have gone. Just as Margaret Thatcher promised, privatisation has meant competition and prices kept down to the benefit of everyone...er, have I missed something? Oh yes, NEVER trust a politician's promises!

  • rate this
    +1

    Comment number 57.

    If it sounds too good to be true then it generally is. You have to be deluded to believe that single unit pricing will bring prices down. The market will always work in favour of the supplier. It has to. That's capitalism. The market is set to encourage rather than discourage energy use, that's why many tariffs charge higher costs per unit for say the first 500 then taper it off as you use more.

  • rate this
    +1

    Comment number 56.

    What we really need is a retail price index aligned to the reality of what people actually earn. Vehicle and consumer fuels should be priced according to the amount you use. less is less, more is more. Oil hoarders should be shut down and fined and speculation in that market outlawed. let's get real not greedy.

  • rate this
    +4

    Comment number 55.

    It is a legal REQUIREMENT of publicly listed companies to maximise profit for their share holders.....


    .....what needs changing is not the regulation on an industry by industry basis but the entire legal basis of business......



    ....companies should be obliged to balance profitability with socially good aims such as increasing employment/pay & conditions......

  • rate this
    0

    Comment number 54.

    Some of the 'confusing' tariffs were introduced to save money for low usage customers (guess who). The move to ban these and simplify structure has increased my estimated annual bill by 25%. Obviously Ofgem are aware of this so I can only conclude all this 'clarification' of tariffs is known to increase annual costs for all customers.

  • rate this
    +1

    Comment number 53.

    If the political will had been there the government of the time (Tory) could have set annual price rise limits into the law but they didn't because it was just another way of moving money from the 99% to the 1% who had money to invest and get share dividends and seats on the boards of the energy companies etc. Same with the railways, water, and anything else you can't do without.

  • rate this
    +7

    Comment number 52.

    A privatisation success story that has truly benefited the customer as well as the tax payer......would have been nice, but instead we got this cartel of bamboozlers who have clearly based their business practices on those masters of misselling, the high street banks.
    Can't wait for the great NHS sell off.....all that private sector efficiency and effective competition.

  • rate this
    +1

    Comment number 51.

    Deckchairs on the Titanic!

    The last thing the UK electricity industry needs is a "beggar your neighbour" price war.

    The price of electricity will become irrelevant when we have blackouts due to lack of capacity.

    The UK power industry requires massive investment. OFGEM should be concentrating all its efforts on infrastructure renewal,

  • Comment number 50.

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

  • rate this
    +3

    Comment number 49.

    Certainly the standing charge, or higher priced first units should stop. It is ludicrous that it gets cheaper if you are rich and use/waste more energy.

  • rate this
    +22

    Comment number 48.

    It's all just smoke and mirrors anyway. Private companies need to increase profit year on year. If they do manage to implement a simpler system that saves customers money they'll just increase their prices to make up the difference.

    All essential services should be nationalised and any profit used to improve infrastructure or reduce prices. It's the only way that makes sense.

  • rate this
    +29

    Comment number 47.

    Why is it Ofgem always appear to speak on behalf of the energy companies? I thought it was us (the taxpayer) who paid their wages to act on OUR behalf!!!

    Can we also see how many past Ofgem staff are now working for the energy companies??? I bet we would all be suprised!

  • rate this
    +28

    Comment number 46.

    Having worked for the water utilities over many years, this further compounds my belief that regulators act more in the interest of the privatised utilities at the expense of the consumer. In general I have found sweetheart relationships thrive between regulators and the private companies.

  • rate this
    +7

    Comment number 45.

    So a supplier says the regulators plans to simplify tarrifs are too complicated!
    why is it that I don't trust either party to be doing the best for me?

  • rate this
    +2

    Comment number 44.

    So they take it in turns to offer the lowest (market) unit price and we all switch suppliers, generating calls and up sell opportunities.
    Meanwhile the cost of all this switching ends up on our bills.
    25p/unit wholesale energy price 25p/unit operational overheads 50p/unit simple charge.

    Makes you wonder why we need all this competition in the supply of a commodity.

  • rate this
    +7

    Comment number 43.

    I've got an idea: nationalise the energy companies! It's not like one company can offer you 'better' electricity anyway. Why are we being held to ransom for our country's natural resources, something we all own?

  • rate this
    +3

    Comment number 42.

    This pseudo-private market can only operate by confusing customers. A clear price would destroy "competition" but be very good for consumers. The answer is obvious. Is it going to happen in this corrupt country? No.

  • rate this
    +2

    Comment number 41.

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

    What a useful statement from the "Which"expert?
    As Fawlty would comment "a statement in the bleeding obvious"

    Can we get a monkey to quote next time?

  • rate this
    +24

    Comment number 40.

    I've grown tired of hearing how government and the regulator aren't able to influence prices and secure a fairer deal for consumers.

    If this is so, then de-regulation of these markets and the privatisation of the utilities should not have happened.

    One of the most annoying things is that high energy prices are being used as a reason for rolling out smart meters - to charge more per unit.

 

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