Table 1 as follows indicates the number of tariffs available to a new domestic gas, electricity and dual fuel customer based on a snapshot of 23 January 2010, with figures provided by Ofgem1. The table excludes: social tariffs; any tariffs that were closed to a new customer as at 23 January 2010; and tariffs for companies other than the main six energy suppliers. The majority of tariffs are available in each region, however there are regional price variations due in part to regional variations in network costs for both gas and electricity.
1 The tariff data were provided by Energy Services Online Ltd [TheEnergyShop.com].
Electricity Gas Dual fuel Direct debit 126 21 133 Standard credit 82 14 86 Prepayment meter 17 6 20
Around half of UK gas and electricity customers pay for their energy via direct debit. Table 2 indicates the number of direct debit tariffs available to new customers in each region by each of the main six domestic energy suppliers. Generally a customer choosing to pay for their energy via any other method will have fewer tariffs open to them.
Any customer looking for a tariff at any one time may be constrained by what region they are in, their meter type, their access to the gas grid, and to some extent by payment method. This will limit the number of choices open to them by varying degrees. The information provided also contains tariffs for Economy 7 and Economy 10 customers, many of whom will be limited to only these types of tariffs to switch to or sign up to.
Government recognise that there are many tariffs for consumers to choose from. We recognise that some customers may value this range of choice in the market; however, we note that this may make it difficult for others to find the best deal. In some cases, two tariffs will have the same price and payment method—but there could be small differences such as club card points, vouchers or donations to different charities turning a single price and payment plan into multiple options. We are talking to Consumer Focus who are working with switching sites to try and resolve this problem.
From this year suppliers will be obligated to provide each customer with additional information to help them understand and compare their energy tariff to other offers in the market.
Suppliers are also obligated under their supply licence to improve the conduct of their face to face sales and marketing activities by providing consumers with information that is clear and not misleading.
Additionally, Ofgem's new over-arching Standards of Conduct state that energy suppliers must not sell a customer a product or service that he or she does not fully understand, or that is inappropriate for their needs and circumstances, or offer products that are unnecessarily complex or confusing.
Ofgem will be monitoring the effectiveness of these remedies. As part of this process they will review whether these changes have proved sufficient to help consumers understand and benefit from the range of tariffs available to them, and consider what further steps may be needed. My officials are discussing the issue of number of tariffs and its impact with consumer groups.