How householders are starting to assert their consumer rights to beat a wave of gas and electricity price increases

Published 20th Dec 2010

Millions of households face higher energy bills in what threatens to be a long and harsh winter. But if you receive a letter from your provider announcing price increases, don't just shrug and accept it - exercise your rights as a consumer and rebel.

British Gas, Scottish and Southern Energy (SSE), npower and ScottishPower have all announced price rises in recent weeks - some by as much as nine per cent.

Although Eon has been quiet so far, an increase for its customers cannot be far off. Only EDF Energy has said it will freeze prices, and then only until March.

Estimates suggest customers will pay an extra £50 a month between December and March as a result of price rises and the particularly cold weather.

But you have the right to refuse price increases, provided you contact your supplier within 20 days of receiving notification of the rise. Tell the provider you do not accept the increase and want to leave. The safest way to do this is by email or in writing so that you have a record.

You then have 15 days to switch to a new provider - but in the meantime you will stay on the existing tariff and rate until the switch goes through. This typically takes about six weeks.

FIRST-TIME SWITCHERS

Households who have never switched supplier before stand to gain the most. The annual saving for a first-time switcher can be as high as £370, according to analysis by energyhelpline.com.

Pam Hirst, 51, from Blackpool, switched for the first time last month and is set to make a £100 a year saving. She had been with British Gas, but after becoming concerned about rising prices following the energy giant's announcement of a seven per cent increases for gas and electricity last month, she was forced into action.

'I'm disabled and on a fixed income so my budget it tight,' says Pam. 'The news of price increases frightened me. I'm already worried about keeping warm this winter. I went online and found it easy to move my supplier.' Pam has switched to Eon's Track and Save tariff. This dual-fuel deal , which she pays with a monthly direct debit , guarantees to be less than British Gas' s standard
prices until next August. After that, customers will be put on to one of Eon's standard tariffs, at which time Pam, who has three grown-up children and three grandchildren, says she will look to switch again if she can save more money. Track and Save is not available to new customers.

At present, the cheapest suppliers for standard dual-fuel tariffs are Eon and EDF - but obviously these are the two companies of the Big Six yet to increase their prices. If Eon puts its prices up in the New Year, Pam's annual saving will be lower.

The average annual household bill is £1,092 with Eon and £1,097 with EDF. These prices are based on the industry standard example - which is supposed to reflect the usage of a typical family three-bedroom home - of 20,500 kWh for gas and 3,300 kWh for electricity per year. But the cheapest supplier will vary, depending on where you live and usage.

For this reason consumers may need to use a switching service, such as the one offered on our sister website thisismoney.co.uk, to find the best deal to suit their needs and get some advice.

For those without access to the internet , Energyhelplinecan be contacted on 0800 074 0745 begin_of_the_skype_highlighting 0800 074 0745 end_of_the_skype_highlighting, where an adviser is available to talk you through the options. Switching is simple and does not involve visits to your home or changes to your pipes or central heating system. Simply apply to your new energy company and it will contact your existing provider to activate the switch.

After this you will be asked to take final meter readings before your old account is closed down and the new one opens.

THE BEST WAY TO SAVE MONEY

Not everyone is comfortable dealing with their financial affairs on the internet - but when it comes to fuel bills, those who are prepared to go online and receive bills by email can make the biggest savings.

The cheapest online dual-fuel deal is £931 a year with First Utility compared with £1,092 a year for the equivalent standard dual-fuel tariff with Eon. The next lowest online tariffs are currently available from npower and Eon.

While all bills and correspondence will be sent by email, customers can still phone the call centre if they have a problem. Power cuts and gas leaks, for example, are still dealt with in the same way, so consumers should not worry that an online tariff will prevent them from phoning their supplier when they need to.

Paying bills monthly by direct debit, even if you don't go online, will also be cheaper than paying on receipt of the bill. A typical home could save between £50 and £200 a year by switching to direct debit.

Mark Todd, managing director of Energyhelpline, says consumers who switch online and who then change their supplier every one to two years will keep their costs the lowest.

FIXED AND CAPPED TARIFFS

Charlotte Austin, 25, an assistant accountant, has just moved into a new flat with her brother, Oli, 23, who takes box office bookings for London theatres, and their friend, Alistair Wright, also 23, a music student. As the three are keen to control household bills for the flat in Sydenham Hill, south-east London, they have opted for a fixed tariff with Atlantic Gas, part of SSE.

The tariff they have chosen is an online deal where the prices are fixed for 12 months.

'I read in the newspapers that gas prices were rising and I'm worried about our household budget,' says Charlotte, who grew up in Billingshurst, West Sussex.

'At least with a fixed rate we know how much we will have to pay each month and there won't be any nasty shocks.'

Charlotte, Oli and Alistair will pay a slight premium compared with SSE's variable online tariff, but they believe that it is worth doing it for peace of mind.

EDF is offering fixed rates until 2015, while ScottishPower's platinum tariff is fixed for four years and also includes boiler insurance worth £150 a year. But the best deals won't be around for long so consumers who know they want to fix should do so quickly.

And you should be aware that fixed-rate deals carry heavy penalties for customers who choose to switch away during the fixed-rate period. EDF's five-year deal, for example, has a £100 exit charge for both gas and electricity in year one, although the fee then reduces.

ScottishPower would charge an exit fee of £20 for gas and £30 for electricity to customers who choose to switch away. Charlotte would pay £35 if she chooses to switch during the next year while she is with Atlantic, but she would do this only in the unlikely event that fuel prices nosedive and the fixed-rate tariff no longer looks attractive.

SERVICE STANDARDS

While price is important, anyone looking to switch may want to investigate the customer service record of different providers.

Utility companies are notorious for poor practices, including overcharging with estimated bills and holding on to customers' 'in-credit' cash. Under rules introduced by Ofgem earlier this year, energy suppliers must refund any accumulated cash if customers ask for it back.

The level of direct debit should also be calculated on the 'best and most current' information available to avoid a build-up of surplus funds on a customer's account.

In a recent report published by consumer watchdog Consumer Focus, npower was ranked the worst of the big six energy companies for complaints handling.

ScottishPower and EDF also fared badly. For more information, go to consumerfocus.org.uk.

SAVING ENERGY CAN CUT COSTS

Saving energy in the home helps with bills. Turn down the thermostat on the central heating just a couple of degrees, switch off lights and do not leave appliances on standby overnight.

For bigger savings, consider double glazing and cavity wall insulation or lagging the loft. There are lots more energy saving ideas at the Energy Saving Trust website - energysavingtrust.org.uk.

The Government's new 'green deal', which forms part of the Energy Bill, will see energy firms offer loans to customers for energy saving measures in the home, such as cavity wall insulation.

More households are opting for green or eco tariffs - and most of the big suppliers offer them. Customers still receive their gas and electricity in the usual way, but the green tariff diverts some of the cash into investments in renewable energy sources, such as wind and solar power.

As such, consumers should expect to pay a slight premium on standard tariffs. Ovo and EDF Energy currently offer the cheapest green tariffs at £1,100 and £1,110 respectively.

Elizabeth and Alastair Riddell from Wellington, Somerset, have gone one step further. With the help of their energy supplier EDF, they have installed solar panels on the roof of their detached bungalow.

Elizabeth, 60, a retired art teacher, and Alastair, 61, who was the chief executive of a biochemicals company and now works part time as a consultant to the Government and universities, used part of the lumpsum payment from his pension to get the panels installed.

They estimate they could earn about £900 a year from the electricity they generate, depending on the weather. This is because through the Eco Renew Scheme and EDF's feed-in tariff, the Government pays 41p per kWh of electricity they generate. They expect this easily to cover the cost of the energy they use, for which they are billed separately by EDF.

The Riddells qualified for a Government grant for £2,500 and they paid the balance of £20,535 to install the panels. This may seem expensive, but for this they had 24 photovoltaic panels fitted and also solar thermal panels that heat their water. This is more than most standard homes would have. Most properties could have panels installed for about half this cost.

Elizabeth says: 'Our daughter works for the carbon disclosure project, an organisation that works to find solutions to climate change, so she inspired us to think more about green energy. The investment in the solar panels seemed like a sensible long-term goal. It's good to be a net generator of energy. We don't feel bad now when we use electrical appliances around the home.'

Elizabeth admits the initial outlay for panels is high, but they do not plan to move house again. Over the long term, the couple hope the decision will pay dividends.

Source: ' ThisIsMoney '

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