British Gas, Eon and SSE named and shamed over energy tariffs
UK regulator highlights groups with highest proportion of customers on standard rates
British Gas, Eon, SSE and Utility Warehouse have the highest proportion of customers on expensive standard energy rates, according to new data, as the government heaps pressure on utilities to drive down bills.
A league table comparing average bills for households on “standard variable tariffs” — which tend to be more expensive than fixed deals — was published on Wednesday for the first time by Ofgem, the UK energy regulator, as part of a drive to encourage customers to switch to cheaper rates.
Ofgem also shows the proportion of each provider’s customers on standard rates. About 20m, or 66 per cent of all households, are currently on these tariffs.
Extra Energy, an independent supplier based in Birmingham, Co-operative Energy and Scottish Power have the most expensive standard rates on average, although the percentage of their total customers on those tariffs is relatively low compared with rivals at 14 per cent, 42 per cent and 50 per cent respectively. Extra Energy customers on the standard tariff pay on average £1,130 a year, according to the regulator.
Utility Warehouse, a London-based provider of energy and telecoms services, has the highest proportion on standard tariffs, at 94 per cent or 503,955 customers, followed by “big six” provider SSE at 91 per cent, or more than 3.8m households.
Ofgem said 74 per cent of British Gas customers, more than 6.6m households, are paying standard rates. The regulator has calculated those customers could save £174 a year by moving to another, cheaper deal on the market.
Npower has the biggest differential between its standard variable tariff and its cheapest rate.
Supplier Customers on
standard variable tariffs
Utility Warehouse 94%
SSE 91%
British Gas 74%
Eon 73%
Npower 59%
EDF 56%
Scottish Power 50%
Co-operative Energy 42%
Ovo 35%
Extra Energy 14%
First Utility 9%
The move follows Theresa May, prime minister, and Philip Hammond, chancellor, naming retail energy as a “key market” that the government wants to make function fairly. Ministers are understood to believe that measures announced by the UK competition watchdog in the summer do not go far enough.
The Competition and Markets Authority announced a price cap in June for customers with pre-payment meters, following a two-year investigation, but stopped short of widespread price controls.
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Greg Clark, business and energy secretary, said on Wednesday that millions of Britons “continue to pay too much for their energy”.
He added: “The measures announced today are a positive step to help more people benefit from increased choice and competition.”
But the move is unlikely to appease consumer groups, which want energy companies to spell out how they are encouraging disengaged customers on expensive standard tariffs to switch.
Alex Neill of the consumer group Which? said: “Publishing more information about the amount that people could save from switching is unlikely to make much difference to the millions of people paying over the odds on expensive standard tariffs. Instead, we need to see much more action by energy suppliers this winter to genuinely engage with their customers on poor value deals.”
A spokesperson for SSE acknowledged the company had a “high proportion” of customers on the standard rate but said its profit margin had averaged at around 5 per cent in “recent years”, suggesting those customers are “getting a fair deal”.
Utility Warehouse called the data “highly misleading”. “As a multi-utility supplier, we offer a range of separate evergreen tariffs which reduce in price based on the combination of services that our customers take from us,” it said in a statement.
Separate figures published on Wednesday by Energy UK, the trade association that represents utility companies, suggested more than 4m households changed supplier in 2016, the highest level for three years.