Customers on electricity-only Economy 7 tariffs saw their bills rise on 1 January 2023, with average annual increases of £116, according to figures from Future Energy Associates reported by the BBC1. The data shows a 7.6% increase, and the rises are attributed largely to EDF and Scottish Power raising Economy 7 rates1.
The result is that Economy 7 users now pay 46% more than other electricity tariffs, an average of £464 per household per year, although the figures note that many electricity-only households use significantly more than an average household1. Compared with dual fuel customers, electricity rates are now 2% more expensive for electricity-only customers1. Standard credit customers also saw electricity bills increase, while unit rate changes varied for those on direct debit and prepayment meters1.
The End Fuel Poverty Coalition said the increases were concentrated in tariffs where suppliers, rather than the Energy Price Guarantee, determine rates. Clement Attwood of Future Energy Associates said:
"It is a little known fact that it is actually up to the supplier to determine rates for some tariffs that are not explicitly capped by the current Energy Price Guarantee rate."
The coalition cited EDF as a standout example, where the most expensive Economy 7 tariff is £598 more expensive than its equivalent constant rate electrical tariff1. On the number of affected households, the figures differ: 3.3m households were on Economy 7 tariffs in England alone in 2021, according to LG Inform and BEIS data, while the BBC reports the figure at 2.5m1. Separately, 2.1m households use electricity only for their heating, according to ONS census data1.
One Economy 7 customer, Jonathan Bean from Buckinghamshire, said his Scottish Power bills rose by 13%1. The End Fuel Poverty Coalition is calling for the £200 alternative fuel payment to be extended to all households on electricity-only tariffs, alongside reforms to energy pricing arrangements1.
Why it matters for households
Economy 7 splits the day into a cheaper overnight period and a more expensive daytime rate, so the value of the tariff depends on how much consumption a household can shift into the cheap hours. The reported 46% gap between Economy 7 and other electricity tariffs means that for homes using electricity for heating and hot water, the daytime rate carries more weight than the overnight discount. The coalition's figures indicate that the gap is not uniform: it varies by supplier, by region and between dual fuel and electricity-only customers1, which is why the comparison between Economy 7 and single-rate costs turns on individual usage patterns rather than the headline percentage. Homes that cannot move load into the night, for example where storage heating or hot water is limited, see less benefit from the cheaper period. The coalition also notes that many electricity-only households use significantly more than an average household, so the £464 average figure understates costs for some1.
What happens next
The coalition is calling for the £200 alternative fuel payment to be extended to all households on electricity-only tariffs and for reforms to energy pricing arrangements to be rolled out as soon as possible1. No timetable for either has been reported.
Sources1 cited
- Millions of energy customers hit by 7.6% hidden price hike - End Fuel Poverty Coalition, endfuelpoverty.org.uk