There’s nothing that better illustrates the sado-masochistic relationship between energy suppliers and their customers than Tariffs. They’ve evolved to be the whip that utilities deploy to beat their users into “correcting” their behaviour. That form of correction may be trying to limit the total amount of energy you use, or changing when you use it. But there’s a clear message coming through – energy suppliers want to be in control of the relationship.
It’s a concept that consumers have a problem with. Survey after survey reports the message that consumers don’t understand tariffs. They don’t even understand the word. And regulators are often less than happy with multiple or complex tariffs, because they’re aware how much they confuse people. That was highlighted in the UK earlier this year when the regulator OFGEM took the paddle to the utilities to persuade them to reduce the hundreds of tariffs in the UK to a few simple ones. But that doesn’t stop utilities fantasising about a future where they can run riot with tariffs. The most extreme example is now being constructed in the UK as part of the British smart metering specifications. These allow a level of complexity that makes the most diabolic tortures devised by the Inquisition look simple. Fighting the consumer interest corner is our Energy regulator – OFGEM, which is about to give up on persuasion and start meting out some punishment itself.
There are some valid reasons for considering complex tariffs, but these need to include consumer engagement as a fundamental feature of their development. What is happening instead, particularly in theUK, is that tariffing structures are being developed as a technical exercise. They are now so complex that they threaten the interoperability, cost and usability of the British smart metering roll-out, setting smart metering up to be the next major UK Government IT disaster.