The country’s only authority-owned energy supplier has launched a new prepayment tariff called Pay-As-You-Go (PAYG).

Nottingham City Council’s Robin Hood Energy, a not-for-profit, licensed energy supplier, launched PAYG last September in order to tackle fuel poverty by providing affordable energy.

PAYG is, according to the council, the cheapest prepayment tariff available on the market today.

Energy companies with more than 50,000 customers are legally obliged to offer a pre-payment option.

Robin Hood Energy, which has fewer than 50,000 customers, has made this move voluntarily because, as Cllr Alan Clark, Nottingham City Council's portfolio holder for Energy and Sustainability, says: ‘It is a not-for-profit enterprise and one of our key objectives is to help tackle fuel poverty.’

An Ofgem report in June this year highlighted concerns that a lack of competition within the prepayment market is resulting in higher energy bills for customers who rely on prepayment tariffs.

PAYG is intended to help customers by offering a competitive tariff.

‘We decided not to wait until we reached 50,000 customers - the regulatory threshold for offering prepayment - to launch PAYG’, Cllr Clark said.

‘Why wait? The right thing to do is to offer this as soon as possible particularly to help people on lower incomes as winter approaches. It's convenient and puts the customer in full control of their energy finances.’