Energy firms "cashing in"

24-08-2007

Energy firms
The UK's electricity suppliers have been accused of "cashing in" on their former regional monopoly status to the tune of £446 million.

Consumers who receive energy supplies from companies that were formerly the sole regional electricity board in their area are being charged more for services than new customers who live elsewhere, according to consumer group uSwitch.

The organisation claims that companies such as npower are charging customers in their "home" regions an average of £32 more each year for supplying electricity to them.

It is claimed that the additional ten per cent charge on such consumers amounts to a "local loyalty tax".

According to energy regulator Ofgem, 53 per cent of all electricity customers are still choosing to receive services from their former regional energy provider, with the previous monopoly on local supplies having ended some years ago as a result of privatisation.

Research by uSwitch shows that in ten out of the 14 electricity regions across the country, the old monopoly supplier is the more expensive than any of its competitors which also operate in the local market.

The study claims that npower is the worst offender, with the energy firm said to be charging customers in its "home" regions an average of £54 more a year than consumers it supplies elsewhere.

Commenting on the results of the research, uSwitch consumer policy director, Ann Robinson, said: "Tactical regional pricing is a tax on loyalty."

She added: "Electricity suppliers are treating local longstanding customers like cash cows, using them to subsidise the more competitive prices they are offering to new customers in other regions."




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