From autumn 2012, the government is forcing the 'Big Six' major energy suppliers to contact all customers every year to advise them of the best energy tariff with their existing supplier. This initiative, announced by Deputy Prime Minister Nick Clegg in mid-April, is intended to cut through the confusion over tariffs and encourage people to shop around for the best energy deals, hence reducing their bills.
Paying too much
It is reckoned that seven out of ten customers are on the wrong tariff for their needs, with many paying too much. But people are understandably wary of changing, when faced with choosing from the more than 120 different tariffs currently on offer. So the onus will be on the energy companies to supply consumers with much more information about tariffs, as follows:
- energy supplier to contact all customers annually with details of the best tariff from that supplier;
- at a customer's request, supplier to identify best available tariff at that time;
- when a fixed-term contract is coming to its end, the supplier will contact the customer to identify the best tariff options;
- customers receiving the Warm Home Discount will receive a second communication each year to help them get the best tariff.
Switch by smartphone?
Also, Nick Clegg announced that the government is working with energy companies to put special tariff barcodes on energy bills. These can be scanned with a smartphone to access quotes for updated tariff options, and enable the customer to switch tariff or supplier on the spot. However, critics have pointed out that the deal only compels energy companies to provide information about their own tariffs. Also, it relies on suppliers to make valid assumptions about each customer based on the information supplied by the customer. Parties to the deal are British Gas, e.on, npower, EDF, Scottish Power and Scottish and Southern Electric (SSE).