Friday, 19 October 2012

Energy tariffs: Why does it have to be so complicated?

Ignoring the big issues like their lying, cheating and dishonesty one of the things that continuously puzzles, frustrates and annoys me about this country and our administration is why they make everything so complicated* when there is a very easy simple route.

This has happened yet again with Cameron announcing that everyone should be automatically put on the cheapest energy tariff. Yes, we all know that one of the biggest problems with energy prices is government intervention and taxation, but just assuming a better tariff would help why should this be a problem?

It’s very easy. At the end of the financial year, or yearly at some convenient date, the energy company calculates what a consumer’s bill would have been had they been on the cheapest tariff for that period. If this is less than the amount actually charged the energy company credits back the difference to the customer. Not perfect perhaps but simple!

Over a few years it would immediately be obvious by comparing average bills, which company was overall most efficient and averaged lower payments, that would guide people to changing companies.

Not only would it work with energy it could be applied to phone tariffs. How many people are fed up with trying to predict their usage in advance and pick the best deal? And more importantly how many, as with energy, get it wrong and end up paying way over the odds?

*Of course we know don’t we. Even Ofgem has given the game away commenting that it would reduce competition. The price complication and tariff jungle and impossibility of advance knowledge is needed precisely and exactly to ensure that nobody can easily pick their best tariff or supply company in advance. That’s not open competition it’s sharp practice which disguises taxes, profits and inefficiencies, we would be better off without such so-called competition. 

We could go even better by having two part gas bills. One part would be the energy company charges for infrastucture, taxes and overheads, the second part would be the raw international spot price for gas which would be passed on directly on at that price.


  1. Being a simple sort of chap i for some reason, foolish yes i'm fully aware of that now, assumed that a long term customer who always paid his bills would automatically be on the most economical price possible...jeez that simple minded enough for ya?...what an idiot i was.

    So for years i paid BG for the leccy and gas they provided.
    Then one day whilst having nothing better to do i tried one of those price comparison sites...entered my fuel usage figures and was amazed that BG could sell me my fuel at a much lower rate than i'd been paying for years.

    Sorry, but being an old fashioned sort of fellow means once bitten never again will the biter see a penny of my money, whatever fancy eyewash they put in their propaganda...a pox on them.

    This power supplier thingy proved to be a bit complicated deliberately so, till i realised that one particular company whilst not the very cheapest was in the lowest three of the comparison charts for my usage, i'd previouly never heard of this company so had a poke nose.

    So clicked on EBICO's website, low and behold simple no nonsense pricing was revealed, you pay one price for Electricity (though obviously differences for night rate) and one price for standing charges whatsoever....simple even for a B pass O level student more years ago than enough.

    Too good to be to true i thought, but after reading more into things with the other companies i found that as with most of life's rip offs the richer you are the cheaper you can buy, EBICO do not believe in this philosophy, their one price is the same however you pay for fuel regardless of quantity, even if on pre pay.

    So for several years now i have been a happy customer of this company, i might save £20 a year going with another supplier, but if that other supplier then cons/rips off/financially rapes the poorest people simply for being poor then i'm quite happy for my small (and it is small) non saving £20 helps keep EBICO's ethical policy going.

    I have no axe to grind other than a developed and probably jaundiced sense of juctice/injustice and apart from being a satisfied customer have no association with EBICO...who are a non profit Christian charity.



  2. I'm locked in a battle with my gas company right now. It's the major issue at this time, moneywise.

  3. Interesting comment about EBICO from Lew. I'll bookmark that.