The pricing and tariffs are over complicated on purpose. Energy companies have far too much power for an essential service.” Lived experience focus group participant, April 2023.
The Energy Security and Net Zero (ESNZ) Committee has launched an inquiry to investigate the process of billing customers for their gas and electricity, to look at whether the rules on charging for energy are fair for all. The Committee wants to understand how a social tariff should be implemented to address inequalities in billing.
In our consultation response, we set out a wide range of policy solutions to create a fairer domestic energy market, emphasising the need for Ofgem and the Government to prioritise the interests of low-income consumers. This includes:
- Introducing an energy social tariff as soon as possible. There is an ongoing affordability crisis in energy. Prices are forecast to remain significantly above their pre-crisis levels for many years to come. The Government needs to urgently honour its commitment to consult on introducing long-term bill support for those least able to afford their energy.
- Reforming standing charges as they are too high. Ofgem should look to recover the fixed costs of the energy system in a fairer way.
- We would like to see an end to premiums for different methods of payment, particularly when those methods of payment are disproportionately used by those on a low income (“poverty premiums”).
- We would also like to see regional differences in energy prices abolished. People on low incomes have told us that they want the energy system to be less complicated and fairer.