Question to the Department for Energy Security & Net Zero:

To ask the Secretary of State for Energy Security and Net Zero, whether he has made an assessment of the potential merits of a Tiered Energy Proposal for consumer energy bills.

A tiered energy pricing system is known as a block tariff. Traditionally, block tariffs are either a rising block tariff where the cost of energy increases in increments the more energy used or, a falling block tariff which acts in reverse. Low energy users benefit more from a rising block tariff and high energy users benefit from a falling block tariff. Since the introduction of the energy price cap in 2018, suppliers can choose to offer block tariffs as a competitive incentive for their business model.

Ofgem, in their recent call for input on standing charges, asked about block tariffs, and feedback from consumer representatives and charities was mixed. As part of Ofgem’s continued work on standing charges, they are seeking views on options including increasing tariff diversity in the market, which could include block tariffs.