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Ofgem says fuel poor must get cheapest deals

Retail energy suppliers must ensure their poorest customers are on the cheapest price plan to count towards their multi-million pound "social tariff" targets, UK energy regulator Ofgem said on Friday.

Posted: Friday, July 25, 2008, 8:15 (BST)
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Retail energy suppliers must ensure their poorest customers are on the cheapest price plan to count towards their multi-million pound "social tariff" targets, UK energy regulator Ofgem said on Friday.

The big six suppliers agreed in April to triple the amount they spend to help people struggling to pay their bills by 2011, after raising household bills at the start of the year.

With more big price increases expected before the year is out, they have committed to increase their spending on social tariffs by a total of 225 million pounds from 2008-2011.

To qualify towards those targets the companies must satisfy Ofgem that their poorest customers are not paying more than the minimum their supplier offers, including online deals.

"Tightening the definition of a social tariff assures eligible customers that they will be on their supplier's best tariff in their area," Ofgem's managing director for corporate affairs, Sarah Harrison, said.

Some "fuel poor" consumers - those spending more than a tenth of their income on energy - could still get a better deal by switching supplier.

But Ofgem's ruling means those eligible customers who do not switch will be automatically put on their supplier's best deal.

Centrica, EDF Energy, EON, npower, Scottish & Southern and Scottish Power spend about 50 million pounds a year on social programmes, but have agreed to raise funding gradually to 150 million pounds by the winter of 2010-11.



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