Getting energy billing right

There's an important post this morning about how to reform energy pricing in the UK. It's well worth reading in full.

What we lack in the UK is a “default tariff,” where everyone could pay a standard transparently fair tariff, says Nick Grealy.

Consumers would be offered a default tariff, based on a transparent cost of service (administration, contribution to the National Grid, profit) and a floating monthly average gas and electricity price pegged to wholesale markets.

Prices on bills would move up - and down - in line with wholesale markets. Utilities wouldn't be able to rig the market by raising prices quickly and lowering them slowly, as some them they do now.

Gas and electricity billing would become transparent.

I've written to my (Conservative) MP saying this reform would be good in two ways:

• Economically - lower energy bills = more disposable income, which would be good for the economy

• Politically
  
  • Lower energy bills = more votes for the government
     
  • Cuts through problem of DECC/PM inconsistency on energy bills policy because it's far more radical
     
  • Trumps Labour's policy of abolishing Ofgem (in fact blows it out of the water), but you can probably still abolish expensive Ofgem, or at least slim it hugely.

Well worth reading and thinking about.