‘Time of use’ energy tariff lessons must be learned, says CAB

By agency reporter
September 25, 2018

Energy customers on legacy ‘time of use’ tariffs continue to receive poor information from their supplier, and many people are still not able to save money by using electricity at off-peak times, according to new research by Citizens Advice. Time of use tariffs are pricing plans that encourage consumers to use electricity at off-peak times when it is available more cheaply.

In its role as the official consumer body for energy, Citizens Advice is calling on regulators and suppliers to learn the lessons of legacy time of use tariffs. It believes that, with new tariffs becoming available as a result of smart meter rollout, it is essential that consumers understand them and are able to take advantage of the benefits.

The report False Economy updates previous research and finds little improvement in the experience of customers on legacy time of use tariffs, such as Economy 7, Economy 10 and Dynamic Teleswitching (DTS), in recent years.

Time of use tariff customers should in theory be able to pay less by using electricity at off-peak times. However, the research revealed just under half (49 per cent) of customers on such tariffs are actively trying to do so.

People cited various reasons they weren’t able to use electricity at off-peak times. Thirty-nine per cent said that is wasn’t practical to use appliances at off-peak times and 28 per cent said it wasn’t practical to heat their home at off-peak times.

The report highlights how customers on legacy time of use tariffs receive poor information which can lead to confusion about their tariff. Only 40 per cent of the people surveyed were confident they knew when their off-peak time was. This means that even customers trying to change their behaviour may not benefit.

The charity is warning that unless lessons are learned, customers may experience the same problems on new time of use tariffs that emerge with the smart meter rollout. It is calling on regulators and suppliers to take action to finally address the problems faced by time of use tariff customers.

In the report, Citizens Advice sets out a number of recommendations, including:

  • Suppliers should regularly provide customers with clear, accessible and up to date information on peak times and rates.
  • Suppliers should set out how they will deliver the outcomes required by Ofgem’s new principles on consumer communications, specifically for legacy time of use customers.
  • Ofgem should consider the needs of legacy time of use customers within any future reform of informed choices.

Victoria MacGregor, Director of Energy at Citizens Advice, said: “It’s clear from this research that even motivated customers may not get the benefits from time of use tariffs if they don’t get the right information and support. To do this, suppliers need to communicate clearly with their customers in ways they understand”.

“If we don’t fix the long-standing problems of these tariffs now, new time of use tariff customers will experience the same frustrations in the future. Suppliers and regulators need to act now to ensure this doesn’t happen.”

* Read the report False Economy here

* Citizens Advice https://www.citizensadvice.org.uk/

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