20 November 2012 Last updated at 03:00 ET
The government will detail later how it intends to force energy firms to offer customers the lowest suitable tariff.
Energy Secretary Ed Davey will set out plans for fulfilling the PM’s pledge last month to bring in legislation.
He will say that companies will have to reduce the number of tariffs to four each for gas and electricity, in a bid to cut the confusing array on offer.
However, Labour said the cheapest deal in an uncompetitive market will still not be a good deal.
David Cameron’s pledge appeared to be a surprise to the energy department at the time.
Automatic switch
In an appearance before Parliament’s energy select committee, Mr Davey is expected to say that firms will offer just four core tariffs for both gas and electricity – a fixed price for a fixed term and a standard variable rate, with two others based on different criteria such as payment method or whether renewable energy is a factor.
Under the plans, companies would be forced to switch customers automatically to the lowest suitable tariff unless they objected.
BBC deputy political editor James Landale says Downing Street insists this means Mr Cameron will have fulfilled his promise.
“But the real test will be whether people actually see smaller bills at a time when energy prices are rising,” our correspondent adds.
Energy regulator Ofgem had been looking into pricing for some time, and published its proposals just days after Mr Cameron’s pledge, but it did not go as far as the government intends to.
Ofgem’s proposals included banning complex multi-tier tariffs, new personalised information to help consumers find their best deal, and ensuring customers default to the cheapest option at the end of a fixed-term contract.
Currently most people buy their gas and electricity from just six big suppliers, although there are smaller suppliers, amid a vast selection of tariffs.
Last month business groups warned that forcing companies to give customers the cheapest tariffs could damage competition in the market.
Renewable targets
The structure of the charges can vary depending on payment method (by direct debit, pre-payment meter, or credit transfer such as cheque), on whether it is an internet-only tariff, which part of the country the customer lives in, if the deal involves a fixed price, when the deal was launched, how long it lasts, and so on.
Commenting ahead of the government’s expected announcement, Labour’s Caroline Flint MP, accused ministers of a “complete breakdown in energy and climate change policy”.
The shadow energy secretary said: “David Cameron’s promises to get tough with the energy giants and to lead the greenest government are lying in tatters.
“Over a month ago David Cameron promised to force the energy companies to put all customers on the cheapest tariff, but since then millions of families have seen their bills go up.”
She warned that “the cheapest deal in an uncompetitive market will still not be a good deal”.
“Unless David Cameron stands up to vested interests in the energy market and creates a tough new watchdog with powers to force energy companies to pass on price cuts his warm words will be cold comfort to people worried about paying their fuel bill this winter,” she said.
Meanwhile, MPs have urged Mr Cameron to end uncertainty for investors and set clear targets for clean energy in 2030.
The Environmental Audit Committee says firms will only invest enough in new renewables if the 2030 target is fixed in the forthcoming Energy Bill.
But Chancellor George Osborne rejects the target – and BBC News understands he is now being backed by the prime minister.
The coalition is seeking a compromise to allow the Liberal Democrats to retain pride in their flagship Bill.
BBC News – Business
Energy tariff plan to be outlined
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