E.ON acts to begin replacing standard variable tariffs for its customers
Standard variable tariffs have had their day. Tomorrow is about customers feeling free to engage with the market with tariffs that work for them.
E.ON has today committed to replacing its standard variable tariff (SVT) with a fixed term tariff for any customers having a smart meter installed. In addition, any SVT customer who already has a smart meter with E.ON will be offered a move to a replacement one-year fixed tariff.
The new one-year fixed tariff will have a price fixed for one year to give customers security. Like a standard variable tariff, this fixed term tariff will have no exit fee and customers are free to engage with the market as they see fit. In the same way as today, customers will be prompted to consider all E.ON’s tariffs to choose a new tariff that best meets their needs.
Under E.ON’s plan customers will have the option to automatically ‘roll’ on to a current version of this fixed term product when that deal ends instead of defaulting to SVT, unless they choose otherwise, which is in line with recent proposals on which Ofgem is consulting.
Michael Lewis, Chief Executive of E.ON UK, said: “We believe standard variable tariffs have had their day. Tomorrow is about helping customers engage with the market with tariffs that work for them. We want to take action now to make that happen for our customers and we’ll work with Ofgem and BEIS over the coming months to make this a reality.
“For us, smart meters are a key means to achieve this move because they represent a natural opportunity for engagement with our customers and the new technology opens up a world of more accurate billing and greater choice. We’ll be ramping up our activity next year so we’re able to start taking thousands of people off standard variable tariff each week – added to which, their smart future will begin with a price drop.
“However, this isn’t only about smart metering customers. We’ll also be working on options for classic meter customers joining us or coming to the end of fixed term tariffs. This is about increasing engagement with customers and having better conversations about what they need from their energy supplier, making sure they have the tools and the knowledge to choose a tariff that best suits their needs.”
Starting in early 2018 standard variable tariffs will no longer be the default option for people coming to the end of their existing tariff. Instead, customers will have the option to ‘roll over’ on to the latest version of a fixed term contract. Existing standard tariff customers who have a smart meter, or who have arranged to have one fitted, will move to a new fixed term tariff with the same ‘roll over’ option or, if they really don’t want to, they will have the possibility to opt out and remain on an evergreen variable tariff.
Over the next few months E.ON will work to refine its processes so customers can enjoy a simple journey to change their meter and switch tariffs.
All E.ON customers can register for a smart meter to be installed. They can also select from a range of tariffs such as a fixed term contract or the new Cap and Track tariff so they can see the benefits of a fixed product whilst waiting for a smart meter to be installed.
Michael Lewis added: “I came into the role of chief executive about five months ago and have spent that time listening to customers and to my colleagues who serve our customers directly and reflecting on how we can do better for customers. Today’s announcement is not the only thing we will do. But this is only the start and it is the first of a number of changes which I want to introduce to increase engagement in the energy market and improve our service to our customers.
“We’ve installed around a million smart meters so far to bring energy supply into the modern age and we’re fully behind the push to make sure every single customer is offered one by 2020. That said, E.ON customers don’t need to wait for a smart meter to feel the positive effects of innovation in the energy market; they can make the choice today to move to any of our other competitive tariffs that provide options.
“We’re already launching new tariffs with unique features such as Cap and Track, which not only benchmarks a price against the rest of the market but protects a customer’s price from rising whilst allowing prices the freedom to fall with the market.”
For more information contact:
Scott Somerville (07889 771 804)
Andrew Barrow (02476 183 677)
Jag Bickham (02476 181 308)
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