Energy pricing methods need a rethink to protect the poorest households from unfair charges

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Sunday 10 October 2021 15:51
<p>Customers will face ‘an extremely difficult time’ in the coming months</p>

Customers will face ‘an extremely difficult time’ in the coming months

Energy competition is now not just a mess, it is a complicated mess and has become worryingly uncertain to a lot of people. (Although no one in the government seems concerned.)

Starting from the premise that everybody needs a basic amount of energy to be able to live safely and that the poorest will tend to use much less per person than the richest, a thorough rethink of energy pricing methods is appropriate.

Currently, we have a “the more you use, the less you pay per unit” approach. If we set a basic level of energy use per household which is sold at a fixed government-controlled price, it will ensure essential energy needs are met at a reasonable cost. And as usage increases above this basic level, the cost per unit should be allowed to rise and also can be subject to market forces. The more affluent (and energy profligate) will therefore pay more per unit and be incentivised to control their energy use. Subsidies, distribution costs and green supplements, for example, could all be built into this pricing structure.

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