Eon replaces SVTs with fixed price contracts
'SVTs have had their day,' says CEO
Eon has become the first of the big six energy suppliers to commit to replacing its standard variable tariff (SVT) with a one-year fixed price contract as part of a package of measures to boost customer engagement.
Smart meter customers and those having a new meter installed will be offered the one-year deal.
“Standard variable tariffs have had their day. Tomorrow is about customers feeling free to engage with the market with tariffs that work for them,” said Michael Lewis, chief executive of Eon UK.
From early 2018, SVTs will no longer be the default option for people coming to the end of their existing tariff, Eon said. Instead, customers will have the option to ‘roll over’ on to the latest version of a fixed term contract.
Aside from registering for a smart meter, all Eon customers can choose from a range of tariffs including fixed term or the new Cap and Track plan, so they can see the benefits of a fixed product while waiting for a smart meter installation.
Eon has also said it will prompt its retail customers to consider all the supplier's tariffs and choose one that best meets their needs. There will be no automatic defaulting to an evergreen SVT unless the customer specifically chooses to do so.
“This is about increasing engagement with customers and having better conversations about what they need from their energy supplier, making sure they have the tools and the knowledge to choose a tariff that best suits their needs,” Lewis added.
Ofgem is determined to improve the way energy suppliers communicate and engage with their retail customers so that consumers are fully informed and able to exercise choice. New guidance based on principles rather than prescriptive rules is expected within months.
“For us, smart meters are a key means to achieve this move because they represent a natural opportunity for engagement with our customers and the new technology opens a world of more accurate billing and greater choice,” Lewis said.
Eon has installed more than one million smart meters to date.
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