Energy supplier npower has unveiled the longest fixed-price energy deal on the market and simplified its tariffs to provide new and existing customers with greater clarity and certainty about their pricing plans.
The Price Fix December 2015 deal locks consumers’ energy prices until December 31st 2015, which is by far the longest deal on the market and, npower hopes, a major attraction to people looking to protect themselves against expected price hikes.
Working out at £1,305 a year, the deal is currently cheaper than any of the standard cash and cheque plans offered by the Big Six and means those on some of the older, more expensive standard tariffs could save up to £50 by switching to the new deal.
npower to the people
The plan has been launched alongside another new npower deal, the Online Price Fix May 2014 offer, which works out at an average bill of £1,226, though prices are only frozen until May 31st next year.
These two new deals are intended to replace the previous Go Fix April 2014 and Energy Online May 2014 plans.
Those hoping to switch to the Price Fix December 2015 plan will be subject to a £50 per fuel cancellation fee until 31st Dec 2015, though paper billing is available, while the Online Price Fix May 2014 deal costs less to cancel – at £30 per fuel – but requires online management of energy bills.
Though npower’s Price Fix December 2015 plan is not the most competitive deal on the market – costing £171 more than the cheapest variable priced plan available, SSE’s Discount Energy Bonus May 2015 tariff with paperless billing – it is still £48 cheaper than the average standard cash and cheque plan.
Other fixed priced deals on the market are cheaper, such as Ovo’s New Energy Fixed plan, which at £1,172 a year is £133 less than npower’s new offer, but this only guarantees prices for 12 months.
Furthermore, the second longest fixed price plan on the market, ScottishPower’s Fixed Price Energy April 2015 offer, only offers protection until March 31st 2015 and is just £34 a year cheaper than npower’s new offer.
The three-year fixed term deal offered by npower is therefore likely to appeal to those on a tight budget, explained Tom Lyon, energy expert at uSwitch.com.
He pointed out that two major energy suppliers have already hinted at fuel price hikes in the coming years, suggesting that locking into a deal now may be a wise investment.
In the past few days, E.ON said it will not rule out implementing another price hike this year, while British Gas last year stated that £60 could be added to consumers’ bills in 2013.
Evidence is therefore “stacking up” for another energy bills hike, according to Mr Lyon, who advised consumers to consider all the options open to them – including the feasibility of switching to the protection and peace of mind offered by a long-term fixed price tariff.
“This new npower plan could be a saving grace to consumers looking to shield themselves from the seemingly inevitable price hikes heading our way,” he explained.
“It’s by no means the cheapest deal on the market, but it does offer shelter from price hikes until the end of 2015. However, it comes with a £50 cancellation fee per fuel, so consumers should weigh this up carefully before signing up. ”
One calculation to take into account for those who have never switched and are currently on one of the most expensive standard tariffs is that they could save almost £50 a year by signing up to the new deal, Mr Lyon elaborated.
“With the added bonus of a price freeze for almost three years, this new offer by npower starts to look quite enticing.”
npower’s unveiling of the two new price plans was supplemented by the announcement that it is to simplify all its standard tariffs to replace the current two-tier tariff structure – something the energy supplier itself admits is a complex process.
From May 1st this year, npower is introducing a single rate for each unit of energy used by consumers, who will pay a fixed standing charge to cover the cost of bringing gas and electricity to their home.
At the moment, some of npower’s gas tariffs have seasonally weighted elements, but this function will be eliminated when the standing charge is introduced, with the energy supplier promising to credit customer accounts to ensure a fair changeover.
Paul Massara, Group Chief Executive at RWE npower, said the company’s goal is to focus on consumers and become the number one in the industry for customer experience by 2015, with the new announcements the first steps on that journey.
“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,” he explained.
“Getting it right for our customers is the driving force behind all that we do, now and in the future.”
The introduction of the longest fixed price energy deal on the market and the move to provide simpler tariffs for all customers on standard tariffs can only be good news for consumers, as other energy suppliers are spurred on to make their mark and boost the attractiveness of their own deals.