Ofgem's plans to simplify energy tariffs: Q&A

“No matter what legislation is brought in, these companies will continue to maintain their profits. Some consumers may win but others will lose. We are all bearing the costs of privatisation apart from the shareholders of course.”

“My electricity supplier used to send me letters marked "Your bill is enclosed' on the envelope, but although they looked almost exactly like bills, they were in fact statements. But anybody who's old or infirm or visually-impaired might well pay up, thinking they were bills, it seems a scam to me.”

“There's no need for energy companies to even have the proposed 4 tariffs, let alone the current level that must average well into double figures.

Why do they need more than one tariff?

The only reason I can think is so they can catch out customers who are not paying attention. Energy companies have introduce a "risk element" for the customer buying their electricity and gas.This practice is more traditionally associated with stock market investment and casinos.

I once looked into the possible benefits of changing energy suppliers with the help of those comparison web-sites. The process highlighted a substantial variation between what customers are charged and realised I'd been grossly discriminated against because of my energy supplier's tariff structure, duel fuel incentives and preferred payment method.

Based on my annual energy consumption I was paying 90% more for my electricity than those paying by direct debit on the cheapest tariff. This price differential for effectively delivering the same product is criminal.

The disparity between what people are charged is completely outrageous and unacceptable that one person's preferred method of payment over another can contribute massively to this difference.

The process of choosing your energy supplier is clearly like selecting an investment product, requiring guidance from a financial advisor to steer you away from making costly decisions. The fixed rate fixed term energy tariffs mirror the approach of banks who entice customers with offers of mortgages or savings accounts with apparently favourable rates.

Like mortgages, they are then tied in to these deals by their terms and conditions which subsequently become uncompetitive due to market trends. Or, like savings accounts, the initial benefits are wiped out because, with the customer being unaware, the deal has been superseded with the latest issue.

With the array of deals available to the customer and their wide ranging and complex price variations, the question is raised about how prices are applied which arise from fluctuations in supply costs. For example how do the energy companies apply the recent cost increases to such a varied and complex pay structure? It appears completely illogical that as the supply costs go up there are some deals costing less. Therefore it follows that one group of customer must be subsidising another.

It seems for the suppliers to offer and manage all these tariffs it has significant cost implications and will mean everyone is paying extra for their energy because of this.”

“This is all very interesting, but at then of the day how will this reduce my gas bill if there is an increase in the gas price. In my opinion this information is designed to show some action by the government on gas prices, when in reality the actual cost gas is not reduced. A couple of days ago, there was a mention that, gas companies would be forced to inform you of their cheapest tariff. Was this a joke! What would stop companies increasing their lowest tariff?

Last week on the TV news, I heard about this gas price increase. It was also mentioned that other gas companies may have to follow this. Why is that so?
I do not honestly know but, I would hazard a guess that it has something to do with keeping their investors, by maintaining similar profit margins. If this is the case, where is the competition between these companies, that I was promised before the gas industry was privatised?

With the utilities, gas and electric, why would it be of concern, to keep in step with one another? Could it be that, the consumer's the experience is the same. Your gas fire lights in exactly the same manner, no matter which company is supplying the gas.
The same is true of water and electricity.

If I then make a comparison to the railways, the experience in many cases with some exceptions, can be different based on the company you chose to travel with. There is a degree of competition based on the company providing the best service.

What is the point of having more than one gas or electricity company, when there is no competition between them?

I remember the days when some these industries were nationalised and were reported to be losing millions for the taxpayer, now they are making millions for private investors. I also suspect that balance between these figures, in real terms, is far greater now than when the industry was nationalised. But one thing was certain, with a nationalised industry. You could have your say through the ballot box. Hence the need for governments of all persuasions to try and hold utility prices down.”

“Who believes this rubbish? If the Government really wanted to do anything about energy bills, they would have had a serious debate on putting the clocks back. In the next 2 weeks we will put the clocks back and not only will we have the lights on in the morning, but also in the evening at 4pm. Bills will go up immediately. In Germany they leave them as they are and they are one of the most productive countries in Europe with many more jobs.
Cameron is barking up the wrong tree and trying to keep the energy companies happy with high profits whilst appeasing the minions.”

“Who believes this rubbish? If the Government really wanted to do anything about energy bills, they would have had a serious debate on putting the clocks back. In the next 2 weeks we will put the clocks back and not only will we have the lights on in the morning, but also in the evening at 4pm. Bills will go up immediately. In Germany they leave them as they are and they are one of the most productive countries in Europe with many more jobs.
Cameron is barking up the wrong tree and trying to keep the energy companies happy with high profits whilst appeasing the minions.”

“If you want someone to blame you should look at the government. It's government mandated spending that is going up year on year. Money for green energy certificates. Money for free insulation and other offers. Money for fitting smart meters. Governments love spending other people's money.
The energy companies aren't making huge profits. If you look at the profits as a percentage of revenue they aren't that great.”

“If Offgem had any spine they would force the energy suppliers to use single unit prices for their energy. It is ridiculous that the first X amount of KWh is somehow more expensive then the rest (but it conveniently makes it near impossible to compare tariffs!)

They could further this by limit the profits energy companies can make on products which are not luxury items but a necessity to live (the same goes for the water companies). This would force them to come down in their prices or re-invest the money they make. It is ridiculous that our people are being fleeced and that money goes straight into the pockets of German, French and Spanish shareholders.

It is a complete farce that there is a proper competition in the market, they all raise their prices at the same time (whilst in Europe these very same companies have last week lowered their prices as the prices on the wholesale markets have plummeted) And I haven't even got the option to change my water company.”