Utility suppliers 'charge original customers more'
Published On 25 August 2007
Utility suppliers are charging customers in their old 'home' regions more for electricity than they charge consumers in the rest of the country, research reveals.Consumer website uSwitch.com has discovered that utility suppliers are still cashing in on their old regional monopolies by charging customers in previously incumbent regions - where the supplier used to be the regional electricity board - up to £54 a year more for electricity.
This means that consumers are paying a total of £446 million more than they should for their electricity.
According to uSwitch, every one of the utility suppliers is more expensive in their old home region than the competition is.
"Tactical regional pricing is a tax on loyalty," commented Ann Robinson, director of consumer policy at uSwitch.com." 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.
"Suppliers know they're onto a good thing - that's why they're thinking of introducing a regional pricing policy for gas too.
"At the moment tactical regional pricing works against consumers and in favour of electricity suppliers because around half of households are still with their original local supplier."
Recently, Powergen revealed that it was to launch a new capped energy product. Customers will be able to fix their utility bills until January 2009.
