Energy customers on legacy time of use (ToU) tariffs aren’t receiving appropriate information from their suppliers and ultimately aren’t saving money by using electricity during off-peak hours, a report from Citizens Advice has claimed.
As the smart meter rollout raises the spectre of new time of use tariffs, Citizens Advice warns they mislead and confuse consumers and urges that regulators and suppliers take action to improve customer experience.
Citizens Advice’s report, False Economy, reveals that just under half (49%) of consumers on legacy time of use tariffs, such as Economy 7, Economy 10 and Dynamic Teleswitching (DTS), are making active efforts to save money by using electricity at off-peak hours, which are often overnight. 65% admitted to using their appliances some of the time or most of the time during peak hours; just 26% managed to ‘hardly ever’ or ‘never’ use appliances during peak times. Households with children were more likely to run appliances during peak times as were homes with people in work, as opposed to households without children and with pensioners.
Consumers cited various reasons for not using electricity off-peak: 39% said it wasn’t practical to use appliances during those hours, while 28% said it wasn’t practical to heat their home during those hours and not during peak times.
Storage heaters can make it practical to use more electricity at night, because they build up heat overnight to release during the day. However, 80% of customers on legacy time of use tariffs do not have storage heaters, Citizens Advice found.
However, even customers attempting to modify their energy use to cut their bills may not register their savings. Just 40% of consumers surveyed by Citizens Advice said they were confident they knew what their off-peak hours were.
Customers on legacy time of use tariffs have little appetite or motivation to switch and are thus more likely to be ripped off by their supplier. Over half (57%) said they had never even tried to switch tariff or provider.
Director of Energy at Citizens Advice Victoria MacGregor said: “It’s clear from this research that even motivated customers may not get the benefits from time of use tariffs if they don’t get the right information and support. To do this, suppliers need to communicate clearly with their customers in ways they understand.”
Citizens Advice is urging suppliers to regularly provide customers with up to date, clear, and accessible information about peak and off-peak hours and rates and for Ofgem to develop and enforce regulations about suppliers’ communication with consumers with particular attention to those on legacy time of use tariffs.
The rise of smart meters may mean a reemergence of time of use tariffs, making new regulation more urgent, Citizens Advice has said.
“If we don’t fix the long-standing problems of these tariffs now, new time of use tariff customers will experience the same frustrations in the future. Suppliers and regulators need to act now to ensure this doesn’t happen,” MacGregor said.
