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Huge energy change could rip-off loyal customers, say Which? and gas and electricity firms
Watch our video above on how you can cut the cost of household bills
OFGEM is being urged not to make a major change to rules which could punish loyal energy customers.
A coalition of energy firms and consumer groups is calling on the regulator to not allow the return of acquisition-only tariffs.
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These cheaper tariffs are only available to new customers and not to existing, loyal ones.
Ofgem has been consulting on plans to remove a ban on acquisition-only tariffs from October this year.
But consumer group Which?, alongside E.ON, Octopus Energy, So Energy, Rebel Energy, End Fuel Poverty Coalition, Citizens Advice and Fair by Design has written a letter to Ofgem urging it to not lift the ban.
In the letter, the organisations warned of the risk of "a return to a market which discriminates against loyal customers".
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They also said lifting the ban could impact customers in debt who can't switch but also can't access a better deal with their existing firm.
It comes after a survey by Which? found 81% would consider it unfair if their supplier was to offer cheaper deals to new customers only.
Almost eight in 10 said they would think this would still be unfair even if it meant them being able to snap up cheaper deals.
Rocio Concha, Which? director of policy and advocacy, said: “Our research has shown that consumers overwhelmingly believe cheaper energy deals only available to new customers are unfair - even when they might stand to benefit.
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"That’s why Which? and a coalition of energy firms and consumer organisations have written to Ofgem warning them not to lift the ban on acquisition-only pricing.
"Allowing deals exclusively for new energy customers could open the door to loyalty penalties and would come at the expense of those who wish to stick with their current supplier on their best deal."
What is the energy price cap?
The Sun campaigned for a ban on acquisition-only tariffs (BAT) before it was imposed in April 2022.
It was introduced to remove the often risky short-term discounted tariffs intended to attract customers to switch suppliers.
Dozens of suppliers collapsed in 2021 and 2022, with many struggling after offering super cheap deals.
EDF said: "We agree with consumer groups and others that a ban on acquisition tariffs should remain.
How do I calculate my energy bill?
BELOW we reveal how you can calculate your own energy bill.
To calculate how much you pay for your energy bill, you must find out your unit rate for gas and electricity and the standing charge for each fuel type.
The unit rate will usually be shown on your bill in p/kWh.The standing charge is a daily charge that is paid 365 days of the year - irrespective of whether or not you use any gas or electricity.
You will then need to note down your own annual energy usage from a previous bill.
Once you have these details, you can work out your gas and electricity costs separately.
Multiply your usage in kWh by the unit rate cost in p/kWh for the corresponding fuel type - this will give you your usage costs.
You'll then need to multiply each standing charge by 365 and add this figure to the totals for your usage - this will then give you your annual costs.
Divide this figure by 12, and you'll be able to determine how much you should expect to pay each month from April 1.
"Acquisition tariffs led to poor outcomes in the past with loyal customers, the elderly and disabled customers hit the hardest.
"There is little to suggest it would be any different this time around. We urge Ofgem to reconsider."
Meanwhile, Simon Francis, coordinator at the End Fuel Poverty Coalition, said: "Removing the ban on acquisition tariffs will create price discrimination against loyal customers and also hurt further the millions of households who can't switch to a new supplier because they are in energy debt.
"Removing the safeguard also means risking a return to the unsustainable form of competition in the energy market that existed before 2021."
A spokesperson for Ofgem said: “We are grateful to the consumer groups and stakeholders for their response to our statutory consultation.
"We appreciate the strength of feeling on this issue and will carefully consider all perspectives in the coming weeks to inform our final decision."
How to save money on your energy bills
A number of energy firms offer struggling customers grants to cover the cost of bills.
The British Gas Energy Trust is currently offering customers grants worth between £250 and £2,000.
The scheme is closing on April 19 though.
EDF is also offering customers in hardship who have received help from a money advice service grants, with no set limit.
Octopus Energy can also offer you help if you are one of its customers through its Octo Assist Fund.
Ovo Energy, Shell Energy, Scottish Power and Utilita Energy all have their own dedicated funds to help struggling households too.
Eligibility criteria varies between all the suppliers, so you should get in touch with yours to see what help is on offer.
It could also be worth fixing your energy deal so you're guaranteed to pay a certain amount.
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Fixing your energy tariff does mean you can end up paying more if Ofgem's price cap falls enough though.
You can use price comparison sites like Compare the Market and MoneySuperMarket to search for the one best suited to your needs.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
Plus, you can join our Facebook group to share your tips and stories
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