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npower announces simplified tariffs, ends two-tier plans

Starting 1 May, npower will offer a single rate for each unit of energy

npower announces simpler plans, ends two-tier billing

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.

Learn More

Better energy bills: how the ‘RMR’ will help you

British Gas ‘clear and simple’

  • Richard Kearsey

    Do the “simplified tariffs” really mean “simplified” and MORE EXPENSIVE tariffs? (…I seem to remember when train fares were “simplified” and were hiked up to simpler and more expensive fares).

    As an energy efficient low user of gas/electricity (using less than 1kWh per day, zero usage most days) will I now have no choice but to have to pay a standing charge in order to subsidise other customers with higher energy usage?

  • Paul Hubbard

    Just Great. I have only just moved over from EON on the advice of U switch and other similar sites only to have a letter from NPower today informing me of a standing charge of 44p per day that’s £13 per month for doing nothing. My annual consumption, as we don,t heat with gas, is only £32 !! What are they playing at !!!!

  • Viv Johnson

    I’ve also received a letter from npower about their new ‘simpler’ tariff which will mean an extra £84/year for me as I am a low energy user. In the letter it states ‘If you’re due to pay more on the new charges we’ll make a one off credit to your account. However, if you spend less than around £27 on gas and £12 on electricity per month, you will see an increase in your overall costs but you will not receive a credit to reflect this.’ So, you will receive a credit if your bill is more, unless you’re a low user – typically pensioners living on their own – surely they shouldn’t get away with discriminating against low users in this way

  • ThreeCheeseFondue

    Well, that’s me gone. I’ll be switching to a different supplier in the next few weeks. Thanks for nothing, Ofgem.

  • RC

    Personally I’d rather be utterly confused by a small bill than pay £180/yr for the privilege of having gas I hardly use, thanks to a range of energy efficiency measures. Now I’m being expected to help pay the bills of those who don’t care … Just brilliant. Bye bye npower, hello Ebico…

  • J Booth

    Basically these changes just penalise the people who have spent money making energy saving changes to the house to cut back on heating bills and cut back on gas bills. These changes are just pointless as you now get better value by using more gas and damaging the planet (as if the Government or Ofgem genuinely care anyway) and lines the pockets of Npower and the Government through increased revenue and taxes. – Had no choice but to get my gas disconnected due to an increased bill of around £200 – Thanks for making it nice and simple – i now have no central heating, hot water or gas cooker. – DISGUSTING!

    • ADS

      I’m switching to a company called Ebico (see online). They have no standing charges and are ideal for those with low consumption, like me. Npower were great when there were no standing charges but now they’re rip-off merchants.