E
nergy suppliers have been
accused of misleading custom-
ers about the benefits of tariffs
affected by the price cap, and
of hiding their cheapest deals.
Some customers are being
directed to deals that are
almost double the price of a
supplier’s standard variable
tariff (SVT), which is limited by
the price cap. Other companies failed to
offer variable tariffs on their websites. In
some cases SVTs have a different name
that does not make it clear that they are
protected by the price cap.
On Thursday the regulator Ofgem said
that the cap, which limits the price that
suppliers can charge the 22 million
households on an SVT for units of gas and
electricity, would go up on April 1. It will
mean that the average household on a
dual fuel deal and paying by direct debit
would get an annual bill of £1,971 — a huge
jump from £1,277. A year’s energy in a
typical detached house could cost up to
£2,600 — a rise of £900 — while an end-of-
terrace home can expect to pay £2,000,
up from £1,300. The cost for a flat would
rise £500 to £1,400, according to the
Energy Saving Trust, which aims to pro-
mote energy conservation and is funded
by the government and the private sector.
To offset the price rises the government
has arranged for most homeowners to get
a £200 discount on energy bills in Octo-
ber, which you’ll pay back through sur-
charges from your supplier over the next
five years. Homes rated A to D for council
tax will get a one-off reduction in their
council tax bills for the year from April.
Is it really “the best” deal?
It used to be the case that fixing your tariff
was the best way to keep your energycosts down, while SVTs, the “default”
option you move to once a fixed deal
ends, were the most expensive. It was
always the case that the most vulnerable
customers ended up on an SVT, which is
why the price cap was introduced.
But surges in the wholesale price of gas
and electricity mean that this is no longer
the case. All SVTs are now fixed at the
cap limit, whereas before some were
cheaper. Fixed deals, which are not sub-
ject to the cap, can now be twice as
expensive or even higher.
The French energy giant EDF told cus-
tomers coming to the end of a fixed rate
that its new fixed tariff is “the best option
for protecting against future price rises”.One customer who was paying £260 a
month was offered a one-year fixed tariff
that would work out at £715 a month
(£8,580 a year) while the SVT would cost
her £358 a month. Another was offered a
fixed deal that worked out at £283 a month
(£3,396 a year), £168 more than her exist-
ing bill. “You’re on our cheapest standard
(variable) tariff, however experts warn
that from April typical energy bills could
rise between £30 and £45 a month. Now
could be a good time to switch to a fixed
tariff and lock in the price you’ll pay for
your energy,” EDF’s email said.
EDF’s website says: “A standard varia-
ble tariff means the unit cost can go up or
down. You don’t get protection against
what’s happening in the energy market
and you can’t budget in the same way.”
While it is true that the price of a stan-
dard tariff changes with the price cap
(usually every six months, although there
is talk of another rise in three months
time), fixed tariffs usually change once a
year, and they are significantly higher
than variable tariffs at the moment.
Scott Byrom from the Energy Shop
comparison site said: “To imply you get
no protection from a variable tariff,
which is protected by the industry’s own
cap, is just wrong — plain and simple.”
EDF said: “At the point of renewal,
customers are given information about
all of our tariffs... We feel our messaging
is fair with the background context pro-
vided, however some more clarity could
be added around the price cap.”
Another customer due to come out of
their fixed rate at the end of this month
got an email from Octopus suggesting she
may consider switching from her £218.47
a month deal to a fixed one costing
£455.35 (£5,464 a year). It listed a variable
rate, at £226.06 a month, but did notmention that it was protected by the cap.
Octopus denies that it was trying to
hide its SVT and claims to have been a
vocal advocate for the price cap. It said
that customers always get a “good-value
product” by doing nothing because they
will be moved to its SVT.
Hiding protected tariffs
SVTs are the cheapest deals at every
supplier, but they can be hard to find.
Eon calls its SVT the EnergyPlan, Ovo
calls it Simpler Energy, Octopus has Flex-
ible Octopus and So Energy has So Flex.Byrom says: “We would urge Ofgem to
enforce a rule that ensures that standard
variable tariffs be named just that.”
Some suppliers make it almost impos-
sible to find the variable rate on their
website. With So Energy, you have to
enter your postcode and other details to
get a list of products — but they will not
include its So Flex variable rate. To find it
you have to go to the “Help” section, then
“More” and click “see all articles”.
So Energy said: “In all direct corre-
spondence with our customers we trans-
parently present the fixed tariff and SVT.”Households who took out the
cheapest fixed-rate energy deals
on the market a year ago are
facing a leap of £1,000 in their
bills when their tariff ends.
In January last year Eon offered
a fixed deal that worked out at
£950 a year for a household with
the average usage. That same
average household will pay £1,971
a year on a standard variable
tariff — an increase of £1,021. The
fixed deals that are available now
are even more expensive.
So Energy had a one-year
deal that worked out at £995
a year for average usage.
Joe Malinowski, founder of
the Energy Shop, said: “The
energy price cap has already
bankrupted over half of all energy
suppliers in the market. Now it is
set to bankrupt the consumer.”FIXED YOUR DEAL
A YEAR AGO?
YOU’RE IN FOR
A £1,000 SHOCKchange our habits — everything they do
just increases our costs.
So I’m afraid that is the message. If
you want a job done properly, you’re
going to have to do it yourself.
Turn down your heating a degree,
have it on a bit less, put on a jumper. It’s
trite, but your granny was right, you
shouldn’t be wearing a T-shirt around
the house when it is cold outside.
While two of the energy companies
were ridiculed for sending out socks, or
suggesting that you cuddle a pet to keep
warm, they were actually right, because
while there are people in fuel poverty
there are even more households that are
incredibly wasteful.
So, little by little, we have to change
our habits. You don’t have to turn off the
heating for days on end, but what about
an hour less a day? Or what about having
a shower instead of wallowing in a bath?
Turn down your boiler temperature,
stuff a pair of tights and use them as a
draught excluder, and start praying now
for a sunny spring. Because that is the
one beacon of hope: on average we use
about half as much gas in April as we do
in March, as the weather gets warmer.
So get that washing line ready, and
read your meter on March 31 to ensure
that you are being billed for what you
used at the existing cheaper rate.
The government won’t keep your bills
down. You have to.
@jimconeyA
friend believes he has a great trick
for beating the hike in energy
prices.
He was so sure that the price
cap would rise significantly in
April that for a few months now he has
been over-reading his meter.
Instead of sending his actual number
of, say, 8333, he tells his supplier that it
is 8400 and insists on paying for what
he has used. Then when the new higher
prices come in after April he’ll send his
supplier the real readings again.
That way, he boasts, he will have
bought extra power when it is cheap
and will buy less when it is expensive.
I’m not going to advocate this level of
dishonesty, but it does at least
demonstrate the lengths to which some
people will go to cut their energy bills
at the moment. No wonder energy
suppliers want us all to have a smart
meter.
The question on everyone’s lips is
how you go about lowering your energy
costs given that all the old tactics, such
as switching to a cheaper deal, are
useless. You can’t even really do
anything practical to make your home
more energy efficient.
You’re hardly going to splash out
£3,000 on insulation, or £10,000 for an
air source heat pump, or £5,000 on
solar panels when you’re already facing
the prospect of lower take-home pay,
more council tax, higher petrol costsand an increase in mortgage rates.
And smart meters. What have they
done to help us in this crisis? These
“free” devices do nothing to help us
trim costs without us changing our
behaviour. What they have done,
though, is add £18 a year to our bills for
the past umpteen years.
This is just one of the hidden levies in
our energy bills, along with the £68 a
year for bailing out customers of the
29 suppliers that have gone bust in the
past year — a consequence of shambolic
regulation by Ofgem.
There is £153 in total for green taxes,
to pay for the government’s failed
strategy that has left us totally exposed
to the wholesale energy markets.
And now we have to pay £200 extra
over the next five years to cover the
cost of keeping our bills down today.
No wonder the government,
regulators and suppliers want us toYour granny was right, you
need to put a jumper on
James Coney
Everything the
government does
just increases
our energy costsFixing your tariff is no longer the best option — not that your
supplier will tell you that, warn David Byers and Ali HussainMONEY
Follow us on Twitter @ST_MoneyWE ARE LUCKY TO STILL BE ABLE
TO AFFORD OUR BILLS — JUST
PAGE 12
The sneaky
tricks of the
energy giants
SUNDAY TIMES ILLUSTRATOR TONY BELLREMINDER:
SEND YOUR
SUPPLIER
YOUR METER
READINGTHE FIXED-RATE DEALS
Ovo Energy, better smart £2,350
EDF Energy, fix total service £2,354
So Energy, so guava green £2,388
Scottish Power, fixed £2,502
Scottish Power, green £2,514
EDF Energy, fix total service £2,554
Outfox the Market, fixed £3,057
British Gas, fixed one £2,227
Eight of the ten fixed deals. Average annual cost. Source: The Energy ShopScottish Power does not list its variable
tariff on its website but lists five fixed
tariffs. EDF lists three fixed deals. Ovo
lists one fixed deal.
British Gas’s site has a pop-up message
warning customers that it might not be
economically viable to take its fixed rate
— £256 more expensive than an SVT.
Shell has removed all fixed deals for
new customers. It website says: “In line
with wider industry advice, we recom-
mend that you stay with your existing
supplier, as you’re unlikely to find a
better deal in the market right now.”