Utility Economics





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Energy tariffs that really are fixed

1)   Signing up as a customer with an energy supplier in the UK I was shocked to see them increase my tariff a month or two later. Given the ease with which they can sign long term, forward or futures contracts of either electricity or (if vertically integrated) primary fuels, shouldn’t all energy suppliers be required to offer domestic customers at least one tariff that that will be guaranteed to be fixed for 12 months ahead? This would be like being offered the choice between a floating rate mortgage and a fixed rate mortgage (for a defined period, of course).

Suppliers who tell you what you actually use in a year – and base their charges on that

2) “The most helpful thing my energy supplier could do for me is to calculate how much energy I have actually used in the last 12 months and then calculate how much my next yearly bill would be using this quantity of energy on their current tariff, and on their view of the next most appropriate tariff for a customer like me. That would save a me a lot of time and actually be useful! In addition it would help me make fair external comparisons, without listening to doorstep salesmen. And if I select this energy supplier the regular Direct Debit amounts they deduct in advance should be based on this calculation, not a higher one. Why doesn’t the regulator oblige all energy suppliers to do this? Indeed why isn’t this standard practice among all utility regulators?”


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