Extracts from NATTA's journal
Renew, issue 148 March-April 2004

8. Long-life energy deal 

Energy consumers could benefit from lower bills and help to combat climate change by being able to sign up to longer contracts with energy companies through a new pilot project announced last Nov. by the government, which suggested that up to one million households could benefit under the scheme.

Under existing rules, consumers can switch energy suppliers after just 28 days. New rules will allow them to choose a longer contract, and in return receive energy efficient products and services from their supplier- such as house insulation, energy efficient boilers and domestic appliances, or low-energy light bulbs. The pilot scheme has been developed by the Energy Services Working Group, set up following Energy White Paper proposals, with representatives from government, the regulator Ofgem, consumer body Energywatch and industry.

Trade and Industry Secretary Patricia Hewitt said: “Just as consumers choose to sign up for longer contracts when they buy mobile phones and receive free kit and extra services, we want to see if there is a market for longer contracts in return for lower electricity and gas bills achieved through energy efficiency”.  She added “This new pilot scheme could provide benefits all round. With the right consumer safeguards in place, consumers will benefit from lower gas and electricity bills, energy companies will benefit from more committed customers- and the environment will benefit from reduced CO2 emissions through improved energy efficiency”.

Suppliers have said the ‘28 day rule’ rule has stopped them offering energy efficient products because of uncertainties over whether their relationships with consumers will last long enough to recover costs. Domestic consumers have also been historically reluctant to invest in energy efficiency.