npower will introduce a simple, standing charge to all customers in May of this year, in an aim to deliver on feedback from customers who want “clear and simple energy tariffs”.
“At the end of January I set out our goal to focus squarely on customers and to make the company number one in the industry for customer experience by 2015,” stated Paul Massara, Group CEO, RWE npower, in a press release.
“We are responding to customers who want clear and simple energy tariffs. From today, we will write to our customers explaining the changes and what it means to them. Having a consistent format across all energy suppliers will help customers make the choice that is right for them. Getting it right for our customers is the driving force behind all that we do, now and in the future.”
npower’s change follows Ofgem’s pledge for a simpler, clearer and fairer energy market in UK with its Retail Market Review, or RMR, in January this year. The three-pronged approach includes:
Simple Choices, including a ban on multi-tier tariffs that are complicated or that are uncompetitive. Suppliers also need to limit the number of tariffs they offer.
Clearer Information, and help understanding billing by a Tariff Comparison Rate that is standardised across the market.
Fairer Treatment, such as deferring customers to the cheapest tariff at the end of their contract.
What is a two-tier plan?
Customers on a two-tier energy plan are charged at one rate until they have used a certain amount of energy, then at a different rate, usually a lower rate, for any energy used over that level. Many households are put on these types of plans by default.
Critics of these plans not only say it’s confusing, but it penalises low-energy users, who tend to be pensioners living on their own in smaller homes.