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Energy price rises hits Economy 7 harder

Which? reveals rising costs for Economy 7 tariff

Customers on Economy 7 energy tariffs have been hit harder by price rises than those on standard tariffs, new Which? research has revealed.

We compared costs with the biggest six energy providers for a medium-use customer in the Midlands over the past two years.

With five of the big six, costs for a customer on Economy 7 rose more than for someone on a standard dual fuel tariff. Only Eon had smaller percentage rises for Economy 7 customers than those on dual fuel, although Eon was the most expensive of the big six at medium use for Economy 7 in 2011. Please see the image below for the full results.

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Economy 7 price rises graphic
Note: these percentages reflect the difference in price between 2011 and 2014, not the overall cheapest option over that period.

What is an Economy 7 electricity tariff?

Economy 7 is one of the most common types of time-of-use tariff – used by 3.9m UK households – where customers are charged different rates for electricity at different times.

As the main benefit of Economy 7 is that electric storage heating can be run at cheaper times, we compared it to dual fuel to represent the cost of both heating and running a home.

We put our findings to the big six energy firms. 

What the Big Six said…

They said the cost of electricity had increased more than gas – however, we believe that this still means that households who rely on electricity for all their energy needs (like many Economy 7 customers) are therefore hit harder with these price rises than those on dual fuel tariffs. Economy 7 prices increased more for five of the six firms (as our graphic, above, shows).

British Gas, Scottish Power and SSE also said we should look at the real-terms increase. But we think percentage increases are a fairer comparison – particularly as the firms themselves announce their own price rises this way.  

Scottish Power and SSE also pointed out the costs of government schemes varied by consumption. The consumption levels we used are published by Ofgem for each type of tariff. We believe they are the best guide to how much customers actually use.

Find out what energy companies’ customers think of them by reading about the best and worst energy companies.

Other problems with electricity tariffs

This is the latest phase of our investigation into Economy 7. Previously, we have uncovered problems with inaccurate meter clocks on time-of-use tariffs and revealed suppliers do not have to check them.  

More on this…

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