I thought my energy tariff with npower was fixed… so why are my bills going up 14.3%

I am on a dual energy tariff with npower, which I thought was fixed until August next year. It is called Energy Online August 14. But last week I received a letter from npower saying my bills would go up by 14.3 per cent on December 1st.

How can this be? Had I realised I was on a variable tariff I would have switched to a fixed deal weeks ago before the best deals were withdrawn from the market.
Why does the tariff have ‘August 2014’ in it if it’s not fixed until this time?

JS. By email.

Confused: The reader thought their energy cost was fixed until August 2014
Rachel Rickard Straus of This is Money says: I can see why you were confused about this tariff – having August 2014 in its name looked to me at first glance like it was fixed until this time as well. I asked npower for an explanation.


A spokesperson for npower says: Energy Online August 2014 is not a fixed price tariff - instead, prices will be at least 2 per cent lower for dual fuel direct debit customers compared to our standard tariff, until 31 August 2014.

This information was explained to all customers signing up to the tariff and they would have also received our tariff guide in their welcome pack, where this information was clearly outlined.
We no longer offer variable products for fixed periods following new guidelines from Ofgem.  We currently only offer standard variable tariffs or fixed price, fixed term products.
All npower customers affected by the price rise will have received a letter from us explaining what it means for them - and any customer concerned about their energy bills should get in touch to find out how we can help.

 

Rachel adds: It seems you are not the only npower customer to be caught out by this. I have been looking at web forums and there are a lot of people on this tariff who appear to have been surprised by the price rises.

Npower tell me that a fixed tariff will always have ‘fixed’ in the name – so you will  be able to tell what sort of tariff you are signing up to.

But the same rule does not apply to variable tariffs. Not all variable tariffs have ‘variable’ in the title.
Fortunately, it seems this confusion over fixed vs variable tariffs will no longer arise, thanks to new Ofgem regulation.
Tom Lyon, energy expert at uSwitch explains: There are three types of energy tariff. One is 'evergreen', which will have no end date, for example standard tariffs.

Npower said it sends out a document to customers explaining the details of their tariff. This one has now been withdrawn

Then there are two types with fixed elements - fixed term and fixed price. The Energy Online August 2014 is a fixed term tariff, because it has a discount element until a particular date. The third type is fixed price - this guarantees a certain price until the tariff expires.
I understand that this can be a bit confusing - particularly as the reader had a tariff with an end date - I can understand they could have assumed it was a fixed price tariff. I have heard of other customers being confused over the naming of tariffs as well.
But as of October 22nd, Oftem has said suppliers can no longer offer new fixed term tariffs, only fixed price. So this confusion is unlikely to occur again from now on because tariffs with an end date will only ever be fixed price.