Energy companies accused of ‘green murder’ for not passing on full green levy reduction to customers

10th December 2013

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Moneysupermarket has warned that some energy companies  are set to commit ‘Green murder’ if they fail to pass on the reduction in the green levy to all customers.

The comparison site has warned that just two of the “Big Six” providers, British Gas and SSE have said that they will pass on the full benefit – worth around £50 a year – to all customers.

The Times reported that the firms planned to pass on the reduction at the time of the Autumn statement.

But Moneysupermarket says some bill payers will be upset to learn their energy supplier might not reduce the cost of their energy at all, mostly penalising those who are savvy switchers and already benefiting from a good value fixed price energy deal.

EDF Energy and E.ON both say their smaller-than-expected price rises (3.9 per cent and 3.5 per cent respectively) reflect the Government-led changes, but they only impact those on variable priced tariffs.

Moneysupermarket says existing customers on fixed deals will not benefit from the Government reduction, while those on variable rate tariffs will still see their bills go up following the recent price rises. E.ON is passing on some of the reductions to all of its electricity customers in the form of a £12 rebate which previously covered the cost of the Warm Home Discount Scheme.

Scottish Power has committed to passing on the amount that the Government proposed but may also only apply it to variable rate standard customers based on the notes in a recent statement says the comparison site.

Finally, npower, the energy company which passed on the biggest autumn price hike – 10.4 per cent – making its standard priced energy bills the most expensive in the UK, has only said that it doesn’t expect to have to raise prices again until 2015, matching the promise made by EDF Energy. It has said it will be reviewing the current price increase to see if these could be reduced, but again this will only apply to variable tariff customers.

Clare Francis, editor-in-chief at MoneySuperMarket, said: “The reduction of green levy commitments for UK energy providers showed all the signs of being a good thing for struggling households who expected to see it reflected in their energy bills. However, indications are that not everyone will win in the war on the cost of energy and some will essentially lose out because they were savvy and switched to pay less in the first place.

“We feel this is unfair as these customers are in effect overpaying on the reduced levy whereas others are paying their fair share. Energy companies should evenly reduce the cost of green levies for all customers, and not have a selective approach as to who will get a reprieve. After all, the Big Six blamed the Government levies to justify inflation busting price increases.

“For the many customers who signed up to a fixed tariff prior to the recent price rises to safeguard their household from the threat of rising prices, the green levy will have been built into the costs, and should now be reduced accordingly.

“Our advice to customers on fixed rate deals is to stay put as their existing tariff is still likely to be cheaper than the products currently available on the market. However, if you are on a fixed rate deal without any exit penalties, it is worth comparing prices once all of the changes take effect as there may be further savings to be made.

“Against a background of rising prices, £50 might be small but when times are tough every little helps. British Gas and SSE must be congratulated for taking this approach, and we would ask that all other providers do likewise.”

 

 

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