Scottish & Southern Energy is simplifying tariffs ahead of the regulator's proposals on market reform.
SSE (Frankfurt: A0RFBG - news) has announced that it will cut the number of tariffs it offers from 68 to only four. In an attempt to simplify bills for its customers, the energy provider will offer just two variable-rate and two fixed-rate deals.
The changes will take effect immediately for new customers, although customers on old tariffs will be allowed to remain on them until they have run their course. Existing customers can choose to switch to the new tariffs if they wish to.
Although there will be only four standard tariffs, SSE did say that customers would be given the option of personalising the tariffs by acquiring Argos loyalty points or making charity donations to the likes of the British Heart Foundation.
The simplification process is the latest step in SSE's 'Building Trust' agenda, launched in October. In December the company pledged to put aside £5m to compensate customers who may have been the victim of mis-selling.
Alistair Phillips-Davies, a director of SSE, said: “Buying energy has become too complex. Energy (NYSEArca: JJE - news) customers want choice, but most customers have a straightforward set of requirements and when they look at the products offered by an energy supplier it should be easy for them to find out which is the best deal for them."
In November (Stuttgart: A0Z24E - news) , British Gas announced plans to simplify its range of tariffs , offering just two tariffs variable and fixed and pledged to offer more understandable billing, with a complete breakdown of all the costs.
Managing director Phil Bentley admitted that British Gas "had not made it easy for customers" and that there was a public lack of trust of the energy industry.
At the time, Adam Scorer of Consumer Focus welcomed the changes. "The penny has dropped. We welcome the news that energy companies recognise that the ways in which they have constructed and sold tariffs has confused, antagonised and alienated consumers," he said.
"Energy is a simple product, it should also be a simple market. Reducing the number and complexity of tariffs won’t bring prices down by itself, but it will help people understand their energy costs and get the best deal available."