Utilita offers tie-in deal

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Energy firm Utilita has announced that it is offering a new deal that will tie consumers in to 12-month contracts.

The tariff, reminiscent of many deals offered by mobile phone companies, is the first to be implemented following a recent Ofgem decision which allows providers to prevent consumers from switching away for up to a year.

Before that Ofgem intervention, energy suppliers were only allowed to lock consumers into the deals they offered for a maximum of 28 days.

Utilita is a smaller energy company that is independent from the big six UK suppliers. Under industry rules, providers are not allowed to sign up new customers for 12 months and then raise prices in the middle of their term.

Consumers have the right to leave the contract if Utilita raises prices - although they will not be able to leave simply because they can get a better deal from somewhere else.

"Longer contracts help us commit to energy-saving measures for customers and we are working to install smart meters more widely than has been done before," David Casale, chief executive of Utilita, said.

"It really wouldn't make sense for us to allow prices on these contracts to become uncompetitive because customers would just walk away at the end of a year."

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