The Warm This Winter coalition has just launched Tariff Watch with a damning report exposing just how much energy suppliers are profiting at the expense of ordinary households.
What is Tariff Watch?
Tariff Watch is a new series of quarterly reports from the Warm This Winter coalition, produced in partnership with Future Energy Associates (FEA).
Each report will look at how much profit energy suppliers are making from fixed tariffs, and whether or not consumers are getting a good deal.
What do I need to know?
- The amount of profit household energy suppliers are allowed to make on every average customer each year rocketed from £27 in spring 2017 to a high of £130 in early 2023.
- While this figure currently sits at £60 per customer, it still means energy firms could be raking in up to £1.74bn in profit over the next 12 months.
- How much you pay for your energy is a postcode lottery, with areas of the country losing out at the hands of suppliers and Distribution Network Operators (DNOs), leading to greater regional inequality in the cost of energy.
What’s the best deal for customers?
- If you use the average amount of energy and pay by direct debit, a one-year fixed price tariff with low unit costs AND an exit fee of less than £80 could be worth switching to.
- Other customers are advised to stay on variable tariffs for now.
- The experts at FEA predict that the best variable deal at the moment could be with two different suppliers - Fuse Energy for your electricity, and Home Energy for your gas which would save £93 a year for direct debit households when compared to the Ofgem Price Cap. But the advice is to think carefully before switching tariffs.
What can we take away from this?
Our energy system isn’t fair, and it just isn’t working for the UK public.
Rather than having to chase the best tariff, the British public urgently needs to see reform in the energy system, an end to our reliance on gas and a transition to cheap homegrown renewable energy, and improvements in home energy efficiency.
Simon Francis, from the End Fuel Poverty Coalition, had this to say:
“This report shines a light on the murky depths of Britain’s broken energy system. Without fundamental overhaul of the energy grid and energy tariffs, households will continue to lose out while suppliers will profit.
“Energy supplier profits predicted for the next 12 months could easily cover the cost of a ‘help to repay’ energy debt scheme and leave quarter of a billion pounds left over.
“But in addition to network reform and immediate support, we also need to see urgent and sustained action to reduce our reliance on high levels of energy consumption, such as improving the energy efficiency of homes, driving an increase in cheap renewables and a move away from the fossil fuel profiteers of the past.”
You can read the full report here.
