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
    +4

    Comment number 219.

    I would welcome a single unit price. The current system of combining a unit price with a daily standing charge makes it difficult to to see which plan is best value without a complex calculation. It a deliberate ploy by energy companies to confuse the consumer ensuring a genuinely competitive energy market can't exist

  • rate this
    +6

    Comment number 218.

    As Wolfie Smith used to say, 'Power to the People!'

  • rate this
    +7

    Comment number 217.

    You allowed private utility companies to rip you off, it was not what Maggie Thatcher promised that interested you, it was the public greed to some short term easy money if you'd be willing to allow private companies and cartels to take off your hands important national assets.. They even got the costs of infrastructure to be paid from your taxes not from profits! A few easy quid got very costly.

  • rate this
    0

    Comment number 216.

    209.Sally says you are free

    I have no personal financial interest in tidal energy, but consider:

    1. We have limited land space but are surrounded by sea
    2. Unlike wind, the tides never stop
    3. once built, it's only cost is maintenance - it uses no fuel
    4. other than construction materials, there are no environmental pollutants
    5. No need to pay people incentives to have it in their areas

  • rate this
    +3

    Comment number 215.

    "Sally says you are free
    I disagree with central planning controls on supply. When allowed to operate, the market does it best"

    Except the true economic costs of fossil fuels are not reflected in the price. You object to our descendants paying for our debt, why do you object to us current users paying for the real cost of our energy that they will ultimately pay for in environmental damage?

  • rate this
    0

    Comment number 214.

    88. MJ, does seem to have a point, perhaps excluding the railways?

  • rate this
    0

    Comment number 213.

    203 Steve obviously no system is perfect,but it might add a little clarity to were & how the price is fixed,especially if their supply cost was included
    209 it is not subsidizing other forms of power but doing what neither government banks or private money is able to do,which is raise capital for investment
    it may not be has cheap or efficient ,but tell your children to tell their grand children

  • rate this
    0

    Comment number 212.

    @Sally

    When the market is allowed to operate, snake oil salesmen and con-artists become rich. The working class suffers from workplace exploitation, and energy is a luxury only to be afforded by those who kiss the proper behinds.

    Historically, freer markets have had more repression and less rights for the common man. 'Liberty' sounds great when you're right, but it's slavery for the poor.

  • rate this
    +3

    Comment number 211.

    I'm just waiting for the energy scandal to break.

    I'm absolutely convinced that at some point proof will emerge that the big energy companies have been colluding in price fixing for over a decade, essentially acting in concert as a cartel.

    It would certainly explain why they don't compete with each other the way that you'd expect them to in a 'free market'[.

  • rate this
    +2

    Comment number 210.

    If ALL energy companies advertised exactly what price THEY were charging per unit for both electricy and gas then the public would know for certain which company they would go to. Obviously the cheaper tariff

  • rate this
    -5

    Comment number 209.

    I applaud EDF's pricing proposals. But, looking for efficiency from a state owned enterprise is like looking for an honest man in Parliament.

    197.BuzzcoreCrew
    That works in North Korea. Or, the state monopoly in California.
    Yay Communism.

    199.Arma1
    If Tidal power were viable, they wouldn't need unfair advantages over other enterprise.
    Do you have shares in a tidal company? Why?

  • rate this
    +4

    Comment number 208.

    193. Sally says you are free

    Coal burning - major source of mercury pollutant in fish leading to toxic levels in humans - autistic symptoms in children.

    Waste Plastic Particles - again in fish, muscles etc. accident waiting to happen thru human consumption in all probability.

    Global warming etc.

    Just because something is cheap now doesn't mean that it doesn't have a costlier consequence.

  • rate this
    0

    Comment number 207.

    Are you saying that all Petrol is the same?

    Only difference being the price?
    My word what a waste of advertising money.
    So it's all the same stuff?

    Like Gas and Electric brought to us by infrastructure built by national companies that we all used to own.

    Now we are simply being taxed. And are supposed to like it.
    Crave it even.

  • rate this
    0

    Comment number 206.

    It remains a scandal why UK power suppliers do not offer unit pricing; all the distractionary discussion regarding paperless billing and online accounts are very obvious smokescreen.
    Ofgem are totally hopeless - it would not be too complex for consumers, that's such tosh.
    I’ve lived and worked in USA, France and Canada – they all have single unit pricing – it’s not too complex.

  • Comment number 205.

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

  • rate this
    +1

    Comment number 204.

    What is the Green Tax,it is investment money,Banks can not lend,companies need to keep profit margin,So the government raises it through a seperate tax,yet any profit generated is lost or obscured from proper scrutiny
    under this system the tax paid will be much clearer proportion,were we do not even know the basic unit cost in electric or gas usage let alone all other hidden items in the bill

  • rate this
    +2

    Comment number 203.

    I am sure they approve of a single unit price makes price fixing easier

  • rate this
    0

    Comment number 202.

    It is important that any standing charges are also removed and incorporated ito the single unit price, otherwise comparisons are still difficult. Removing standing charges is also to the advantage to the fuel poor whose usage is relatively lower in most cases.

  • rate this
    +2

    Comment number 201.

    Anything to simplify would be most welcome. The present methods are too complicated for many of us older folk as well as having no provision for the great number of rural dwellers who are off the gas grid and rely on LPG deliveries. There are no dual fuel tariffs for us!

  • rate this
    -4

    Comment number 200.

    Surely if EDF were able to reach its goal on pricing, it would have achieved this privately, rather than pressure by media?

    192.Arma1
    I guess we'll have to agree to disagree. At least we agree on making execs liable for damage they cause. A good 1st step.

    I disagree with central planning controls on supply. Historically this has been disastrous. When allowed to operate, the market does it best.

 

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