Savvy energy consumers to pay £100 more a year, plus green levies

16 May 2013

Bitterwallet - energy efficiency labelsWith snow and hailstorms in May, you could be forgiven for anticipating another ‘summer’ like last year’s. Coupled with the never-ending winter, it is no wonder people are worried about their energy bills.

But never fear, the Government is here to make sure you pay even more on your future energy bills. Yes, the helpful sorts who added all kinds of green levies to your bill are proposing in new regulation that would ensure energy companies can only offer a limited number of tariffs and that all consumers must be put on the cheapest tariff for them. And all this means £££ on your bill.

The Queen’s Speech last week unveiled a new Energy Bill, which included proposals for a new nuclear, wind and other clean generation subsidy, which will add around £114 to bills by 2030. This is on top of other subsidies of £42 for wind (yes, again*), solar and new technologies and carbon taxes of up to £115 by the same date. The Government’s own figures show average bills are expected to go up by £76 from £1,255 this year to £1,331 in 2020. By 2030, however, the total increase will be £221, up to £1,476. And that’s before the energy companies factor in price rises to maintain their huge profits.

However, the new regulations aimed at making energy providers more ‘responsible’ also backfires on savvy consumers. Requiring the number of tariffs to be minimised will reduce choice and may remove the current best option available to consumers. Forcing suppliers to put everyone on their best tariff is actually likely to result in price rises for up to 1 in 5 consumers- the ones who have already taken the time to shop around.

Government figures (again) show that up to 20% of households could see an immediate £100 increase in energy bills once the number of tariffs is reduced to four, as energy suppliers can’t ‘afford’ to let everyone in on the cheap deals.

"You don’t need a PhD in economics to work out what will happen – the cheapest deals in the market will disappear," sniffed shadow energy secretary Caroline Flint, who is campaigning instead for a single-unit-price comparator system, something supported by our friends over at Which!

Energy Secretary Ed Daveyhas admitted that bills will rise substantially but claims they would rise even more if the Energy Bill and other policies were not in place.  But then he would say that.

A Department of Energy and Climate Change spokesman said:  “Stuff you.” "We must strike a balance between ensuring all consumers - including the majority that currently don't switch - are on the cheapest tariff for them, and maintaining competitive pressures on suppliers to compete and innovate to offer attractive deals to consumers."

* yes, two subsidies for wind power, when we also pay wind farms not to generate electricity on too windy days. Heads wind farmers (and Big Energy) win, tails domestic energy bill payers lose...

TOPICS:   Utilities

3 comments

  • Mark H.
    'Forcing suppliers to put everyone on their best tariff is actually likely to result in price rises for up to 1 in 5 consumers- the ones who have already taken the time to shop around.' So 4 out of 5 consumers will be better off? Seems like a fair trade off to me.
  • mark i.
    The four retards get a better deal whilst the one who used to get off his arse and doesn't require spoon feeding gets penalised... Brilliant.
  • PlatinumPlatypus
    The Big Six especially exploit consumer confusion to rip off even 'savvy' consumers who switch. Ever wondered why all their tariffs have 'May 2013' etc on the end of the name? It's because when you're signed up they can change the price of your tariff later while offering a better price to switchers on their new 'March 2014' or whatever tariff. More ethical smaller suppliers I have noticed have one or two tariffs for *all* their existing customers and new business. Reducing the ability of the less scrupulous to run tens or hundreds of tariffs concurrently will encourage fairer competition that far more consumers will actually understand.

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