Regional pricing pushes up the overall price of electricity

Electricity prices are being pushed higher for some customers as former monopoly suppliers impose a ten per cent "loyalty tax", a report by uSwitch.com finds today.

Companies that formerly operated as regional electricity boards still hold 53 per cent monopolies in some regions and are able to imposed £32 levies on customers, according to the report.

In some regions the 'home' supplier is £51, or 16 per cent, more expensive than competitors who have entered the market.

"Tactical regional pricing is a tax on loyalty. Electricity suppliers are treating local longstanding customers like cash cows, using them to subsidise the more competitive prices they are offering to new customers in other regions," said Ann Robinson, director of consumer policy at uSwitch.com.

All 14 suppliers of electricity in the UK operate a regional pricing policy, charging different prices based on region to provide exactly the same service, and ten suppliers were found to be more expensive than every other supplier in their home region.

Npower is the worst offender, charging customers an average of £54 more in its home regions than in other areas around the country.

The average price for electricity from the company across the whole country is £344, but in areas where it was formerly the monopoly supplier, including Leeds, Newcastle and Birmingham, the average is £398.

In London the incumbent supplier, EDF Energy, is £26 more expensive on average, based on a medium use electricity user (3,300kWh), paying by direct debit.

"At the moment tactical regional pricing works against consumers and in favour of electricity suppliers because around half of households are still with their original local supplier," continued Ms Robinson.

"The tables are very easily turned though. With savings of around 16 per cent on offer consumers just need to take advantage of one of the many cheaper deals available from competitors."

Sources: http://www.myfinances.co.uk

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