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Utilita Energy pays customers £76 for using off-peak energy

Rebecca Goodman
Written By:
Rebecca Goodman

Pay-as-you-go Utilita Energy customers could be paid up to £76 for using power during off-peak times.

The ‘Power Payback’ trial sees smart meter prepayment customers paid for reducing their electricity use during peak hours over the winter.

The scheme is currently in a trial stage and is running for a month. Households that take part in the scheme will be sent a text message an hour before the peak period, usually between 5.30pm and 10.30pm. This will happen once a week over the month-long trial.

Those who successfully reduce their energy consumption during these times will be given energy credits by the provider, equivalent to the amount of money they’ve saved by reducing their energy use.

The trial has been active for a week already, with 1,020 households taking part, and 72% of those have already received payments for reducing their energy consumption during peak hours.

If it is successful the supplier said it could cut up to £61.2m collectively off customer bills each year.

Once the trial ends, the scheme will be open for customers of Utilita to sign up to in winter 2023, although the exact date for this hasn’t been confirmed yet.

It comes as the National Grid has issued warnings that there could be power cuts, in the worst-case scenario, this winter if energy stocks run low.

Energy prices have soared over the last year due to rises in wholesale costs. They are now an average of £2,500 due to the Energy Price Guarantee, and predicted to rise to £3,700 when this ends in April. 

A first for prepayment customers

The provider has one tariff, Smart +PAYG, which is a prepaid tariff with a smart meter. Utilita said it works differently to other prepayment providers, with tariffs proactively chosen by customers (rather than a customer being moved onto a prepayment meter by force if they are in debt to a provider). It also doesn’t apply any standing charges when a meter hasn’t been topped up.

It said the cost of its tariff is calculated on the “average cost of energy” that the provider pays when buying energy for its customers. It said by helping customers to avoid using energy in peak times, it can pay less for energy during these periods and can pass these savings onto customers.

Utilita said this trial is the first available for customers who prepay for their energy.

A similar trial was launched by Ovo Energy last month paying customers who switch their energy habits and use power during off-peak hours.

Balancing supply and demand

George Walters, Utilita’s chief home services officer, said: “Our Power Payback trial has been in development for over a year with a view to establish how consumers can respond to price signals, and while it remains very unlikely National Grid have to ask customers to reduce consumption this winter like the fear-mongering predicts, consumers will increasingly be able to support the balancing of supply and demand.

“So far, so good – within 48 hours of inviting customers to sign-up for the Power Payback trial, we were already oversubscribed by 50%, which is really encouraging.”

The aim of the trial is to reduce energy use in peak hours but also to understand how willing customers are to reduce their energy consumption during peak times.

The provider said it will look at the length of the peak hours to see if it’s easier for customers to make savings with shorter or longer periods.

National Grid’s ‘demand flexibility service’

The launch from Utilita comes in the same month as the National Grid began its ‘demand flexibility service’ . While Utilita’s scheme is completely separate, it works in a similar way.

The service received approval from Ofgem last week and started on 1 November. It will run until March and providers signing up will be encouraged to pay customers who use less electricity in peak hours.

Energy providers sign up to the scheme and they decide how they will reward customers who save money by tweaking their energy use. Households who want to benefit need to wait for their energy company to contact them with details of how they will use the scheme.