the best deals for service providers
Electricity Revenue Sharing is a major part of the government’s efforts to stimulate the economy. Energy providers are required to share their fixed charges with customers, as well as any fluctuations in the prices they pay for supplies. These charges are then collected from consumers and passed on to the Government. The idea is to gradually replace the traditional ways of collecting such revenues by using competitive bidding to obtain the best deals for service providers. One way this works is by encouraging new suppliers to participate in these auctions and receive a slice of the pie in the form of fixed or variable rate cuts, which they are then able to pass on to customers.
With the increase in competition, customers have also increased their willingness to shop around for the lowest tariff available. As the competition grows, there will be more pressure to obtain the best deals and the providers will be more willing to reduce their prices in order to attract new business. In addition, customers are now more aware of how much money they are spending each month on their electricity tariffs and how they can save. So customers are prepared to pay a little more for better service, if it means that they are saving themselves a few pounds or even a whole week off their current tariff.
the efficiency of fixed rate tariffs
Customers have always been suspicious of the efficiency of fixed rate tariffs because they feel that the tariffs are fixed over the long term and the rate cannot be reduced. This is not the case however, as competition amongst suppliers has meant that they are reducing their prices and giving incentives to customers to switch to their service. This allows the customer to secure a better deal than they would get from a supplier whose tariff had already been reduced. This also encourages the supplier to continue to provide competitive rates, so customers may find that they do not need to pay as much as they could using a supplier whose tariff has been reduced.
It is not just the customers who benefit from competitive rates. In some cases suppliers will reduce the tariffs on existing contracts, in order to encourage new customers to sign up. This reduces the cost for the supplier because they only have to supply the service to the existing customer rather than having to provide it to a whole new market. However, this also means that fixed rate tariffs are more vulnerable to rate cut, especially during the summer months. If a supplier moves their fixed rate tariffs up in order to protect their fixed rate, the customer is left with the option of switching back and taking their contract with them if they want to.
large amounts of electricity
With competition between suppliers, customers can get a better deal than they would get elsewhere. However, it is important that they check that their deal is not overpriced, especially if they regularly use large amounts of electricity. It is also important that customers know what they are paying for, whether it is a fixed rate, a renewable tariff, an energy price cap, or any other alternative tariff. Knowing the exact cost of their electricity bills will ensure that customers do not overpay for their electricity.
There are several other types of tariffs available to customers when they are looking for electricity. For example, they may receive a Flexible Tariff, which allows them to switch tariff plans during the period of their contract. Some suppliers will also give away some tariffs in order to encourage customers to switch. All customers should check what they are receiving before deciding on the best deal for their needs.