British Gas to Offer 'Free' Power on Saturdays or Sundays
Britain’s biggest energy supplier British Gas is to offer households free power on Saturdays or Sundays as it attempts to halt an exodus of customers to cheaper rivals.
The Telegraph understands the energy giant is preparing a national campaign to launch the so-called FreeTime tariff this summer, in the hope of retaining customers and persuading them to let it install smart energy meters in their homes.
The deal would see households offered "free electricity" between 9am and 5pm on either Saturday or Sunday, using smart meters to monitor their usage in real-time.
But consumer experts warned that the eye-catching deal, which British Gas first mooted in 2013 and has been trialling at a small scale since, could still work out significantly more expensive than the best value tariffs in the market.
The free power is also unlikely to be unlimited, with British Gas already threatening to revoke its trial tariff from customers if they use an “unreasonably large amount of electricity” for free.
Customers who live in flats or in remote rural areas meanwhile may find themselves ineligible for the deal, because the technology needed for smart meters does not yet work in these areas.
The planned launch of the deal follows regulator Ofgem lifting its restriction on the number of tariffs suppliers can offer, and comes afterBritish Gas reported last month that it had lost 224,000 gas and electricity accounts in the first three months of the year alone.
The company has now been losing customers for five consecutive years, as ministers and regulators urge households to shop around for better deals, but said it was planning to fight back with “innovative new tariffs”.
Pam Conway, head of smart strategy at British Gas, told MPs this month that customers on its FreeTime trial saved on average £60 per year on their electricity bills.
About half of the saving was from getting their usual Saturday or Sunday electricity usage for free, while the other half was by storing up electricity-intensive activities like washing the laundry to do on the "free" day instead of at other times.
Ms Conway told MPs that households were not charged any more than usual for power they used on other days, with both the unit rate and daily standing charge the same as British Gas’s standard variable rate.
However, its standard variable rate – which comes in at £1,044 a year for a typical household – is significantly more expensive than the best deals in the market, which are less than £800 a year. They include a deal operated by British Gas under the branding Sainsbury’s Energy, for £750 a year.
Tom Lyon, energy expert at price comparison website uSwitch, pointed out that while the promised £60 saving from the free power might appeal to British Gas customers, "its average standard variable customer would actually be £234 a year better off by switching to a deal from Sainsbury's Energy, which British Gas runs on behalf of the supermarket".
It is thought the full-scale launch of the tariff, like the trial, will also offer prices on “non-free” days at or below the level of the standard tariff.
The FreeTime tariff is the first major national tariff to use smart meters to offer different prices at different times of day – akin to old Economy 7 meters, which offer customers cheaper power overnight.
Both the industry and the Government are enthusiastic about thepotential for more sophisticated “time of use” tariffs which could eventually vary at half-hourly intervals, offering cheaper power when solar and wind energy are plentiful.
However, MPs have expressed concerns that this will end up with punitively high prices being charged at peak times when supplies are short, penalising people who are unable to adjust their behaviour.
British Gas declined to comment.
SOURCE: telegraph.co.uk - http://www.telegraph.co.uk/news/2016/05/13/british-gas-to-offer-free-power-on-saturdays-or-sundays/
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