Energy giant slashes tariffs from 68 to four in boost for consumers

SCOTTISH energy giant SSE has thrown down the gauntlet to its rivals by cutting scores of complex pricing ranges to just four core options, claiming it will protect customers from numerous “bamboozling” consumer offers.

The group, which runs Scottish Hydro as well as Southern Electric, said the move to just two variable and two fixed rate tariffs would “meet the needs of the vast majority of customers”.

The move came ahead of the closing date tomorrow for comments on Ofgem’s proposals for the retail energy market first published last October.

SSE claimed the initiative was an attempt to build on its announcement of a “Building Trust” agenda with consumers, including no “predatory pricing” and more transparency on electricity and gas pricing.

As part of that move the Scottish group broke ranks with others in the Big Six of British energy by saying it would auction all its power in the open wholesale market to boost transparency and remove a barrier to entry for new energy suppliers.

SSE generation and supply director Alistair Phillips‑Davies said changes in the sector were needed because although choice was a good thing, “if you have an awful lot of choices and you present it poorly, it’s bamboozling to customers”.

He hailed it as the “most dramatic and radical simplification” in pricing in the sector in years, saying that SSE believed most customers “want to know what they owe and why they owe it”.

Tony Keeling, the Scottish group’s customer service director, said that SSE offered more than 68 tariff options to new customers last October before launching its consumer promise. “People could not see the wood for the trees. You had to click multiple times on our website. It was not an easy experience for the customer,” he said.

With today’s tariff shake-up, the company said customers would still be able to get a more personalised service if they answered just five simple questions face to face, over the phone or online to find the best deal. These will be where they live, including postcode; the type of meter they have; how much energy they use; their preferred payment method; and how they wish to manage their account.

SSE said the new four core products would be available to all customers, and there would be no preferential treatment for internet customers.

The company also said it had no plans to change its policy of not offering duel fuel discounts under the new simplified price range.

The move was welcomed by consumer groups and the regulator, Ofgem. A spokesman for the regulator said: “Energy tariffs are far too confusing for customers to understand and moves by some suppliers to address this are a welcome step forward.”

Trisha McAuley, deputy director at watchdog Consumer Focus Scotland, said: “Customers in Scotland are often bewildered by the complexity and baffling array of energy tariffs on offer.

“This can form a major barrier to people switching and can put-off people from seeking a better deal. SSE’s moves to address this problem are welcome.”

Meanwhile, SSE’s Phillips-Davies said Ofgem’s preference for “forcing customers on to a single type of product” across the industry could have “unintended consequences” of being detrimental to some poorer and more vulnerable customers.

He said SSE had not ruled out taking Ofgem to the Competition Commission if it persevered with the proposal.