Today marks the launching of a market tracker by British Gas, which will see customers’ bills reviewed each quarter to ensure they are in line with the wholesale price.
The British Gas Market Tracker will follow any changes in the wholesale gas and electricity markets, in the same way that tracker mortgages reflect the Bank of England base rate.
Bills will reflect changes in the market more accurately, allowing customers a more transparent view of the true rise and fall of the market, compared to the traditional method of billing which spreads the difference out and protects customers from the potential volatility of the market.
The British Gas Tracker will commence tracking wholesale prices from 1st September 2007; prices will be fixed at the beginning of each quarter and not reviewed until the end of that quarter.
Phil Bentley, British Gas Managing Director, said: “This new product is for those people who understand and accept the risk that their bills could move up or down far more frequently – but they are guaranteed that their bills are reviewed every quarter.
“As the mortgage market has successfully done - we now have a product to match the risk portfolio for all customers – from those who want long term security with fixed prices to those who want cheap internet deals and now those who want to be closer to the true market costs with our tracker.”
But Geoff Slaughter, Energy Manager at independent comparison site uSwitch.com, warns consumers to be wary of such products: “It is an interesting and innovative product. But with wholesale energy prices predicted to be on the way up, this new energy plan needs a ‘buyer beware’ stamp on it.
“It will only be suitable for a very special type of consumer, who is completely comfortable with the idea that their energy bills could go up as well as down on a far more frequent basis.”
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