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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  • Comment number 139.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +2

    Comment number 138.

    @132

    Because all energy companies actually do is collect your money and all these measures make it easier and cheaper for them.

    Competition in the energy market is a nonsense since companies source energy from similar places using the exact same supply methods. We could easily do without energy companies however we would have to rely on govt to organise and maintain supply effectively.

  • rate this
    -4

    Comment number 137.

    126.ExUK1937
    The answer is in proper implementation of effective competition...
    =
    I agree.
    Look at mobile phones. Initially only wealthy business men could afford them, now even the poor often have 2. Same with computers, TVs, white goods etc etc. Even clothing and food became more productive when done privately & competitively.

    We need this competition in energy, a vital area of people's lives.

  • rate this
    +2

    Comment number 136.

    These days electricity is required to live, ie cooking, washing, etc. With this in mind employing a capitalist model to provide this service is insanity. This goes for every other public service people need. I don't think any of us would be doing very well if the NHS was privatised. These company's are vicious greedy monoliths that do not have customers best interests at heart and hiding profits.

  • rate this
    +2

    Comment number 135.

    122.Sally says you are free
    Yes to more regulation. We have one of the freest energy markets in the world. Take British Gas, they buy their electricity from the wholesale arm of centrica, they do not declare the price bought & they do not have to shop around for a better price. Energy prices are set in the same way as Libor, and we know what happened there. Its a cartel in a but name

  • rate this
    +2

    Comment number 134.

    So Ofgem think it would be not that easy to implement, would we need Ofgem if it was implemented is the question?.

  • rate this
    +4

    Comment number 133.

    This is the most sensible thing that I have ever heard an energy company say. The current system is designed to confuse and to make the market imperfect. By having only single prices to compare, one will know who to contract with immediately. Why not do it now today!!

  • rate this
    +2

    Comment number 132.

    Currently if you buy both gas and electric you pay a lower rate - why ? If you pay in advance via a pre pay meter your pay more - why ? If you pay by DD you pay less than someone who pays cash - why ? If you are a low use customer you often pay more per unit - why ? If you are a high use customer you pay less per unit - why ? I you don't have the internet you are disadvantaged for choice - why ?

  • rate this
    +3

    Comment number 131.

    Why is Ofgem trying so hard to win the prize for the UK's worst independent regulator? Of course unit pricing is essential for full transparency. One of the provisions of the Magna Carta was the simplification and standardisation of measures to protect the people from getting ripped off. If even the wicked King John got it...why is it taking Ofgem so long to get it.

  • rate this
    +2

    Comment number 130.

    This will never happen because the government will not impose it in fear of upsetting their allies in big business, its like the foreign exchange rate, you never get what it says on the tin. no matter where you change a euro against the pound that is what you should get, ie the official rate, however Banks are milking this for every penny they can. more money for big business. corruption or what !

  • rate this
    +2

    Comment number 129.

    It will be price per unit, but on this deal gas is higher but electricity is lower, or vice versa on this deal. It will still be up to the individual to employ a maths graduate to figure out which is cheaper.

  • rate this
    +11

    Comment number 128.

    A simple equation surely?

    1kwh of energy costs £x, use 100 units per month = x-x100?

    But no, it's too easy to rip off old ladies and the less fortunate for what is essentially just a bunch of call centres doling out bills for the same power down the same lines straight from the generator.

    But the less we use the more the prices will go up !

  • Comment number 127.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    -1

    Comment number 126.

    @117 State intervention rarely makes anything better. Witness the current crisis in generator capacity where successive governments have been unable to objectively assess the facts & OK new power stations. The lights start going out in 3-5 years & then watch prices jump! The answer is in proper implementation of effective competition law. Collusion is theft and miscreants should really suffer.

  • rate this
    +1

    Comment number 125.

    Oh Ofgem again...
    The same regulator who forced Southern Electric to remove my price plan for a more simpler one? So now I pay £25 more per year, not much but gee whiz thanks Ofgem. I was on a no standing charge so when I was away from home I was not paying anything. Now!!
    Next time stay out of my business.

  • rate this
    0

    Comment number 124.

    So if energy company A was losing it's customers because its rate was too high it would drop it to attract them back, then it would put it back up again to maintain profits.

    Should be good business for the switching companies.

  • rate this
    +1

    Comment number 123.

    In a world where life is becoming more and more fast paced, the pricing should be as transparent as possible, I have in the past come up against endless choice of tariffs, something I just don't have time to read, its nothing more than a profit maker.

  • rate this
    -7

    Comment number 122.

    120.Little
    Unfortunately I use many of those imposed monopolies. But, I endorse them no more than when we were forced to use the great clunking phones of the BT monopoly.

    All you list are built by private contractors, by private money, which also pays for all the teachers, nurses and doctors too.

    100.Trout Mask Replica
    What would advocate the solution be to power costs, even more regulations?

  • rate this
    0

    Comment number 121.

    To make a true fair market so that we can all make real choices, first all energy companies should have to set their prices at the same time. Permit them only two days six months apart to alter their prices. That with only one price for the same unit measured, no front loading so the poor using less power pay the most, and the rich pay the least. Not hard to order by any regulator on our side.

  • rate this
    -1

    Comment number 120.

    114.Sally says you are free - "..........What I earn belongs to me, all of it......."


    So presumably with that attitude you make no use whatsoever of the things funded by taxation, such as state schools, the NHS, our road & rail networks et al......

 

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