The UK energy regulator Ofgem could force energy suppliers to offer a new uniform basic tariff to protect customers against rocketing bills.
The move is one of the options being considered as part of the regulator’s investigation of the energy market, which reports in March and could recommend that the industry be referred to the Competition Commission.
Energy companies would oppose having to offer the same standardised dual-fuel tariff – for electricity and gas combined – as their rivals. But consumer rights groups argue that complex tariffs are confusing to consumers and most suppliers still do not properly explain their billing.
A standardised tariff would probably cost more than other tariffs offered by companies but would be guaranteed not to increase by more than a certain amount each year, giving customers peace of mind against unpredictable rises. Recent consumer surveys have found that energy companies are less trusted than banks. It is understood that Ofgem, which is still in the early stages of the inquiry, has not approached companies about the idea. A spokesman for Ofgem said: “We are keeping all the options on the table at the moment.”
Separately, John Robertson, an MP on the energy and climate change select committee, has written to the chairman, Tim Yeo, the former Conservative environment minister, urging him to launch an inquiry into energy bills.
The Labour MP’s Glasgow North-West constituency has the largest amount of single women pensioners in the UK, many of whom are in fuel poverty, spending a 10th of their income on heating. He said: “I wish the Tory MPs who like to bang on about Europe in the chamber would get up in the house and take this government to account for the fact that in other European countries they have been paying less for their energy. I bet they would find more constituents who are more concerned about their energy bills, than any parliamentary bill on Europe.”
Ofgem launched its inquiry in November, after saying that the annual profit margin on a standard household dual-fuel tariff is now about £90, up 38% since September.
It also said in September that it was investigating Scottish Power, Scottish and Southern Energy, RWE npower and EDF Energy over claims that they are misleading customers who are persuaded to switch supplier on their doorstep or over the phone.
UK households face record energy bills this winter. Last month was the coldest December since 1890, while most of the “big six” – E.ON, RWE npower, Scottish Power, Scottish and Southern Energy, Centrica and EDF – increased bills before Christmas.
