25 January 2007
Energy supplier npower has announced that it is to run a trial programme whereby consumers can opt for a tracker bill which will base its charges on the rise and fall of wholesale prices.
On the plus side, it should result in consumers feeling the benefit of lower wholesale prices far quicker than on a standard tariff, but equally, should wholesale prices rise, the consumer will be hit earlier with an increased bill.
Geoff Slaughter, commercial manager of home services at the price comparison and switching website uSwitch.com, said that while it was good to see energy suppliers responding to criticism, it was important for them to be clear about the fact that the tracker tariff may not benefit everybody.
He said: "uSwitch.com warns consumers to look at the tracker product in more detail and compare it against npower's online tariff which is currently cheaper."
"In the light of decreasing wholesale energy prices, npower would have to implement a significant price reduction at the first opportunity to make its new product truly competitive," Mr Slaughter added.
Julia Lynch Williams, head of product management at npower, stressed to the Guardian that the tariff was very much on trial and that the supplier would be keen to review it early next year.
"We've launched the first energy tracker because we wanted to bring some new thinking to the market. We are treating this as a pilot project and will review the way the scheme has worked in March 2008 when this trial ends," she said.