Ofgem's energy plans could cost consumers £55m3.4 million households could pay over the odds for energy
22 April 2013
Which? has found that Ofgem's energy reform proposals could lead to more complexity for consumers trying to find the cheapest energy tariffs.
Energy regulator Ofgem's reforms aim to simplify tariffs, but Which? has found they are likely to add yet more complexity. Under Ofgem's plans, more than 3.4 million households could struggle to find the best energy tariff for their needs. Collectively, these households could pay up to £55m more than they need to.
Energy plans far too complicated
Ofgem has proposed a Tariff Comparison Rate (TCR) with the aim of allowing consumers to compare the price of different tariffs across the market. The TCR is based on medium usage of both gas and electricity, but only a quarter of consumers are medium users. As a result, three quarters of people could be advised on a deal does not represent their actual usage.
Which? executive director, Richard Lloyd said: 'These current proposals are far too complicated and will fail to achieve their aim of making it easier for people to find the best deal.'
Low users could lose out
Under Ofgem's proposals, around 500,000 low energy users could be mis-directed to the wrong tariff. These low energy users tend to be on the lowest incomes.
Which? believes that Ofgem's TCR proposals don't go far enough to help consumers navigate the maze of complicated energy tariffs.
Single unit price for energy
We want to see the introduction of a single unit price for energy tariffs, in the same way petrol prices are displayed, to enable customers to easily compare prices and find the best deal for them.
Mr Lloyd said: 'The government should introduce single unit prices for each energy tariff so people can easily see the best deal for them at a glance. Only then will people have the confidence to switch, injecting much needed competition into the broken energy market.'
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