England, U.K. — (METERING.COM) — September 8, 2008 – Energy suppliers are preying on their poorest customers with discriminatory tariffs that squeeze extra revenue out Pre-payment Meter users which includes many of those least able to afford to pay their energy bills and least able to switch. While energywatch has achieved much in our seven years of action on behalf of consumers, it is a matter of deep regret that this has become more of a problem, not less.” According to Alan Asher, Chief executive of energywatch.
As it published its final annual report, energywatch called for government and regulators to turn the tide of discrimination against Britain’s poorest energy consumers.
Despite the well documented impact of soaring energy prices on the poorest consumers, energy companies still extort the poor while reserving their cheapest deals for more affluent customers.
Pre-payment meter (PPM) consumers and those paying by standard credit routinely pay far more for the same amount of energy than can be justified by the extra costs of serving those payment methods.
After the recent price rises, when two of the six companies did not raise their online tariffs, the scale of the difference between prices for those who can access online tariffs and those who are stuck on PPMs is obscene and without justification.
A consumer checking the cheapest online energy deals on an online price comparison website will probably be shocked to discover that:
The Poor Pay More league
- British Gas charges ppm customers £567 more than online customers
- E.on charges ppm customers £411 more than online customers
- Npower charge ppm customers £378 more than online customers
- ScottishPower charges ppm customers £172 more than online customers
- SSE charges ppm customers £167 more than online customers
EDF has no equivalent tariff.
(Ofgem estimates that the extra cost to energy companies of serving ppm households is approximately £80 per year if a household has a ppm for both gas and electricity.)
The final energywatch annual report highlights the areas where the watchdog has made real gains for consumers. As well as providing direct help for six million consumers, listed among energywatch’s successes are:
- Won £35m for consumers in compensation, goodwill payments and reductions in bills – more than £9m in its final year;
- Won a code of conduct for consumers which cut mis-selling complaints by 87%;
- Won for consumers a charter which cut transfer complaints by 58%;
- Won improved industry standards over debt-blocking, back-charging and disconnections;
- Won a ruling by Ofgem to limit back-billing as a result of company incompetence; and
- Won investigations by the BERR select committee and the industry regulator Ofgem into lack of competition in the energy market
Allan Asher concluded: “energywatch staff can be proud of what they have achieved for consumers. We helped to slash mis-selling, disconnections and transfer problems and made real advances in positioning consumers’ rights at the heart of the operation of the market.
“However to maintain these gains requires an enlightened focus on genuine competition, customer care and social responsibility from industry and those who regulate it.
“I wish Consumer Focus and the other bodies that succeed us every success in campaigning for fair prices and better service for Britain’s energy consumers.”
“My hope is that energywatch will be remembered as a friend to those with the right intentions and a thorough pain to those who only see consumers as a source of income or nuisances to be ignored.”
energywatch annual report 2007-08 http://www.energywatch.org.uk/publications/annual_reports/index.asp