EDF wants single prices for energy - but won't do it alone

Currently some suppliers charge per unit of gas and electricity, along with a standing charge to cover items such as distribution costs. Others operate a two-tier structure, where customers are charged a lower unit rate once a certain amount of energy has been used, while prices also vary by region.

These different systems make it confusing for consumers to easily compare deals.

But EDF is calling for all suppliers to scrap regional prices and standing charges so consumers just have one gas and electricity price to compare against others. However, it will only implement the scheme if other suppliers also commit to it.

The idea for a single tariff without a standing charge has been championed by consumer group Which? (see the Which? calls for single prices for energy bills MSE News story).

MoneySavingExpert.com clubs manager Archna Luthra says: "A single unit price across the board will certainly help ease the problems with navigating the overly-complex energy market.

"But it means some may end up paying more in the long run, so alongside this added transparency there must be a push for more affordable energy."

Not 'as simple as it sounds'

However, other suppliers, including E.on, British Gas and Scottish and Southern Energy, aren't supportive of the scheme. E.on says it would be "unfair to many consumers" as a fixed cost would result in some paying more.

Energy regulator Ofgem says the idea isn't "as simple as it sounds". Instead, it's planning to bring in a 'tariff comparison rate', which takes into account standing charges and unit rates. But unlike Which?'s single unit rate, Ofgem's rate will be based on average energy consumption.

Ofgem retail markets and research partner Maxine Frerk says: "Ofgem has already looked at the unit price option and found that it is not as simple as it sounds. It does not take into account, for example, discounts for payment method, dual fuel and paperless billing.

"Our extensive consumer research indicates that customers value these discounts, and our reforms seek to deliver simplicity while retaining the choice that consumers value."