Time of use customers 'may overpay'

Many energy customers on "time of use" tariffs could be paying more than they should because they do not have storage heaters or use their appliances at the right time, a study has found.

More than a third (38%) of those signed up to the tariffs, which have peak and off-peak rates, do not have a storage heater in their home or fail to regularly use power at cheaper times and would be better off on alternative deals, said Consumer Focus.

Customers also reported confusion about off-peak times and rates, with many unsure about which are the cheaper hours, how much energy they need to use at off-peak rates to get the benefit of their tariff and how this compares to their consumption.

The Department of Energy and Climate Change estimates that a fifth of energy customers (19.5%) are on Economy 7, or time of use, tariffs and that a further 20% will take these up when smart meters are introduced.

Around six out of 10 users (59%) say more information would help them make better use of their tariff.

Consumer Focus found that the amount of energy customers need to use off-peak to make the tariffs cost-effective "varies widely" from 45% with British Gas to 15% for those with Scottish Power.

The group has called on suppliers to provide better information about the tariffs and to proactively contact customers who are not using the deals effectively.

It also wants suppliers to offer to bill customers with a standard tariff or replace their meter when they are not benefiting from a time of use deal.

Consumer Focus energy spokeswoman Hannah Mummery said: "Hundreds of thousands of customers on deals with off-peak rates are likely to be paying over the odds on these tariffs. Many of these customers don't know when their off-peak rates kick in and how to get the maximum savings from their tariff.

"We need to see much better information and advice provided to these customers by energy firms so people don't lose out. We'd also strongly advise customers who think they may not be benefiting from their time of use tariff to shop around to see whether they could pay less for the energy they use on another type of deal."