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Peter Black and South Wales West Liberal DemocratsRepresenting Aberavon, Bridgend, Gower, Neath, Ogmore, Port Talbot, and Swansea |
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Two tier charging structure reinforces need for better regulation of fuel bills
February 7, 2008 12:00 AM
New research showing that some gas and electricity suppliers are operating a two-tier pricing structure, which leaves at least 13 million households paying more for energy than the cheapest deals on the market, reinforces the need for better regulation of gas and electricity companies, the Welsh Liberal Democrat Social Justice Spokesperson, Peter Black, has said.
Mr. Black was referring to research by the price comparison website uSwitch.com which showed that utilities operators such as Npower and EDF are keeping online deals low to attract "price-sensitive" consumers while raising the cost for those paying by direct debit or quarterly payments.
According to the research a medium user on the Click Energy 4 tariff would save more than £300 a year, paying £742 compared with £1,055 for a quarterly bill. Online tariffs offered by the other big five energy companies offer discounts of between £98 and £214. Ofgem, the energy regulator, estimates that customers could save £1bn a year by switching to cheaper deals while one industry expert claims the selective overcharging is as high as £5.8bn.
Many customers with families or houses of above-average size will save up to £400.
Commenting on the research, Mr. Black said: "Some of the most vulnerable people in our society will be using pre-payment meters, yet this research confirms that they are the most penalised of all energy consumers. According to Energywatch, in the most extreme case, a north-east England prepayment customer with British Gas and Npower can over-pay by £486 more a year. That sort of discrepancy applies in Wales as well."
"Coming on top of the news that consumers in Wales are paying up to 18% more for electricity than customers in England the case for tighter regulation has now become over-whelming. The government should stop sitting on the fence and act now."
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