Energy Costs: Huhne Proposes Energy Providers Tell Customers of Better Deals



Huhne

Huhne

Chris Huhne, Secretary of State for Energy and Climate Change, has come up with a proposal that will require energy companies to tell their customers whether they could get a better price on their energy bill through a different tariff.

Consumers don’t shop around

This proposal comes after recent figures reported that only 25% of consumers do their due diligence and shop around for the best prices on energy.

One of the main factors affecting this could be the complicated tariffs from energy providers, which results in many people paying their bill without reading into how the totals were tallied. Consumer laziness is also a big factor in the issue, as many are accustomed to one type of tariff and do not want to work to change it.

Chris Huhne appeared to blame consumers in a speech on energy reform last week, but his new proposal says otherwise, putting the burden of disclosure fully on the corporations rather than the consumers.

Customers must take initiative

This kind of proposal could put an end to suspected foul play in the energy industry, in which providers nudge up prices for the blissfully ignorant 75% of consumers who do not shop around, and give competitive prices to the savvy 25% who would potentially switch energy providers.

This does not mean that all consumers will get the fairest and best deal, however. Customers will still need to go online to obtain accounts, as that is where many of the cheapest deals can be found. There are also customers on pre-pay meters who already understand that an arrangement that directly debits their usage would be more cost effective.

Still, the bill could shake up the retail energy sector into competition and growth. Four years ago, Scottish & Southern Energy were able to move 1 million customers away from British Gas, but since then the energy market has not seen any real shakeups.

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