November 8, 2016
Four months on from the market investigation that found consumers are collectively overpaying by £1.4 billion for their energy, Which? is challenging energy companies to show how they are engaging with their customers stuck on the worst deals.
Around 16 million people - over half (58%) of energy customers - are stuck on standard variable tariffs (SVT) with a 'Big Six' provider, the default and usually most expensive tariff. The Competition and Markets Authority (CMA) has said that more must be done to get energy companies to engage with these customers. Yet, new Which? research has found that three-quarters (74%) of people said they have not been contacted by their supplier about changing their tariff in the four months since the inquiry was completed.
Which? also found that nearly nine in ten (86%) people said they think it is the energy companies responsibility to help customers better understand their energy usage and nine in ten (89%) say it is the energy companies responsibility to make sure they adequately understand their bill.
Which? is calling on all energy companies to find new ways of getting customers stuck on poor value deals to move. Our 'Fair Energy Prices' campaign is challenging the energy companies to publish plans by 31st January 2017 detailing how they will engage standard tariff customers and take immediate action this winter to deliver against this plan.
Which? will be publishing a scorecard to track the responses from the energy companies. The Government and the regulator must be ready to act if companies fail to deliver for their customers.
Lawrence Slade, chief executive of Energy UK, said of the campaign announcement
"Over recent weeks' Which? and others have challenged energy companies to set out what they will do for consumers 'stuck' on standard variable tariffs.
"While we would question whether people are really 'stuck' on standard tariffs, the industry is committed to help people benefit from the greatest intensity of competition there has ever been in the energy market.
"It is important that trusted voices help people realise the benefits of competition and the ease of switching. If people are told continually that they are stuck, we shouldn't be surprised if they act as if they are stuck. In fact, it has never been easier to switch to a good deal - which in some cases could save households £300 per year."
As a result of the CMA's report in to the energy industry, OFGEM, the industry regulator, are introducing a number of major reforms to make it easier for people to get the benefits of a competitive market.
Energy companies are working with Ofgem and others to implement CMA remedies over the coming months. Individual companies will of course do more and we welcome the fact that Which? will highlight what companies are doing and what more could be done.
Posted on November 8, 2016 at 02:29 PM
October 31, 2016
Energy Saving Week launched on Monday 31st October. It is a national campaign to help people cut their fuel bills and get all the financial support they are entitled to.
The week focuses on raising public awareness of how to switch energy supplier or tariff to get the best deal and make homes energy efficient. This is the sixth Big Energy Saving Week and is a partnership between Citizens Advice, the Energy Saving Trust and the Department of Business, Energy and Industrial Strategy with the support of numerous organisations, charities and companies.
There are events throughout the country, click here to see where the closest event to you is.
Energylinx provide a free and impartial comparison and switching service. To see what you could save on your energy bills click here or call 01259 220000.
Posted on October 31, 2016 at 04:03 PM
October 27, 2016
ScottishPower has launched a new fixed price energy tariff, Help Beat Cancer Fixed Price Energy January 2019, in partnership with Cancer Research UK.
The partnership between ScottishPower and Cancer Research UK began in 2012 and was renewed for another 3 years in 2015. So far, ScottishPower has raised more than £9million for cancer research.
Key Features of Help Beat Cancer Fixed Price Energy January 2019:
• Fixed energy prices until the end of January 2019
• At an average dual fuel bill value of just £942*
• No exit fees
A dual fuel customer that signs up to this new tariff is just £4 per month more versus ScottishPower's current Online Fixed Saver November 2017 v2* tariff (which has exit fees of £30 per fuel), whilst providing over a year's longer price protection.
What's more, ScottishPower will make a donation to Cancer Research UK for every month a customer is on the tariff, up to a maximum of £5 per fuel per annum, until the end of the tariff term
*Based on a GB average dual fuel domestic customer using Ofgem typical annual consumption of 3,100kWh of Standard Rate electricity and 12,500kWh of gas each year and paying by monthly Direct Debit for the period ending 31 November 2017.
Posted on October 27, 2016 at 11:04 AM
October 21, 2016
Nearly 400,000 (376,511) households switched electricity supplier in September 2016. This is a 21% increase compared to September 2015; and brings the total number of switches to over three million (3,377,317) so far this year.
Energy UK's latest electricity switching data also shows that over 70,000 customers switched to a smaller supplier last month. This is 19% of all switches.
Lawrence Slade, chief executive of Energy UK, said:
"I urge everyone to spend a few minutes to make sure they are on the best deal before winter hits. Join millions of people that have already saved hundreds of pounds so far in 2016. Deals are coming to an end every month so don't miss out on over 100 deals under £1,000.
The energy market is more competitive than it has ever been. With over 40 suppliers in the market and with the Energy Switch Guarantee in place customers should reap the benefits."
If you're on one of the following tariffs then it will end on the 31st of October:
• Co-operative Energy Fair & Square October 2016 - Paperless
• First Utility Energylinx Collective Switch October 2016 - Paperless
• First Utility iSave Fixed October 2016 (v28) - Paperless
• First Utility iSave Fixed October 2016 - Paperless
• First Utility iSave Fixed October 2016 v2 - Paperless
• First Utility The Big Deal October 2016 - Paperless
• Flow Energy Connect 2 - Paperless
• Flow Energy Connect 3 - Paperless
• npower Fixed Energy Online October 2016 - Paperless
• npower Online Price Fix October 2016 - Paperless
• Sainsbury's Energy Fixed Price October 2016 - Paper and Paperless
• Sainsbury's Energy Price Freeze October 2016 - Paper and Paperless
• Sainsbury's Energy Price Promise October 2016 - Paper and Paperless
• ScottishPower Online Fixed Price Energy October 2016 - Paperless
Posted on October 21, 2016 at 01:40 PM
October 6, 2016
A brief recap of what's been happening in the energy industry over the last 7 days.
Loyal Energy Customers Left out from Cheapest Tariffs (Saturday 1st October)
Four of the "Big Six" energy suppliers won't put existing customers on their cheapest tariffs. With the lowest priced deals only being available to new customers. In some cases the deals for existing customers are hundreds of pounds more a year. The four companies, E.ON, EDF, SSE and British Gas said they were simply responding to changes in the market.
While the British Gas tariff has now been withdrawn, other suppliers are still restricting their offers to new customers only.
Such deals were originally banned by the regulator Ofgem in April 2014. Following a recommendation from the Competition and Markets Authority (CMA) in April this year, Ofgem let it be known it would no longer enforce these rules.
Ken Geddes, the chief executive of Energylinx, the largest energy price comparison business in the UK was "gob-smacked" on finding out how large the difference in cost new customers pay in comparison to existing customers.
Mr Geddes tested a new-customer-only tariff from E.ON, launched in mid-September.
He first applied as an E.ON customer and then as a customer of another company. The difference in the two prices he got from E.ON was £260.
"Having spent over a decade doing this job, I don't think I've ever seen that differential", Mr Geddes told the BBC. "I'm just gob-smacked as to the difference in price".
Not all major energy suppliers plan to offer such tariffs.
Scottish Power's Colin McNeil, Commercial Director:
"These tariffs must stop. We must recognise that we are still not a trusted industry, and perceived sharp practices do the industry no favours."
"Any of our customers can switch freely to any of our tariffs at any time."
The four energy companies which have offered the new-customer only tariffs, E.ON, EDF, SSE and British Gas, all say that they are responding to changes in the energy market and that their new tariffs are part of a strategy to serve a wide range of customers.
Ofgem's chief executive Dermot Nolan said that Ofgem had acted on the CMA's recommendation "to make energy competition more similar to telecoms because on the whole that will mean lower prices and better deals for consumers"
Prime Minister Sets Out Energy Retail Intervention Plans (Wednesday 5th October)
Speaking at the Conservative Party conference today, the prime minister pledged that the government "can and should be a force for good, that the state exists to provide what individual people, communities and markets cannot, and that we should employ the power of government for the good of the people."
May continued "That's why where markets are dysfunctional, we should be prepared to intervene. Where companies are exploiting the failures of the market in which they operate, where consumer choice is inhibited by deliberately complex pricing structures, we must set the market right."
The point being that it's just not right that two thirds of energy customers in the United Kingdom are stuck on the most expensive standard tariffs.
This builds on comments earlier in the party conference from business and energy secretary Greg Clark, who said the government "will act" on the £2 billion of consumer detriment outlined by the Competition and Markets Authority (CMA) "in the next few weeks and months".
The PM's comments follow rumours that the government plans to extend price caps after the CMA recommended a transitional price cap for prepayment customers until the completion of the smart meter rollout.
Fracking Approved by UK Government (Thursday 6th October)
Horizontal fracking can go ahead, the government has said, in a landmark ruling for the UK shale gas industry.
Communities Secretary Sajid Javid has approved plans for fracking at Caudrilla's Preston New Road site in Lancashire.
A second site, Roseacre Wood, has not yet been given the green light amid concerns over the impact on the area.
It means, for the first time, UK shale rock will be fracked horizontally, which is expected to yield more gas.
Environmentalists and local campaign groups reacted angrily to the decision, with Friends of the Earth campaigner Pollyanna Steiner calling it a "betrayal of local people".
"Fracking goes against everything we need to do to tackle climate change. The government must end its fixation with dirty fossil fuels and focus instead on harnessing the UK's huge renewable energy resource."
In 2011, all fracking was suspended in the UK after it caused earthquakes near Blackpool. The ban was lifted in 2012. It is not the first time fracking has been approved since the ban was lifted - but it is the first to involve horizontal drilling.
In horizontal fracking, the well is turned horizontally at depth to extract gas from a layer - or layers - of shale rock.
It is seen as far more productive than conventional vertical drilling, which goes directly through the seam and reaches a smaller area.
Posted on October 6, 2016 at 01:09 PM
September 23, 2016
In a response to customer feedback calling for more transparency, simpler billing and greater convenience, ScottishPower are using new technology to put customers in control of their energy spend.
Simplifying the way customers purchase gas and electricity, the energy supplier will be launching 'PowerUp'. Using a model similar to how people fill up their cars at the petrol station, for the first-time ever, consumers will be able to purchase 'days' of gas and electricity, with an app that allows them to keep an eye on their gauge, to manage their usage.
PowerUp allows customers to buy fuel in packages from one day to a month, up to 180 days, upfront at a set price. Customers will track their usage via a new app, allowing them to easily understand their total spend in relation to what they use and how much they pay on a daily basis. There will be no 'standing charges' for customers paying via PowerUp, so if no energy is used on a given day, no charges will be applied.
PowerUp will initially be exclusively available to ScottishPower customers, from early October 2016.
Neil Clitheroe, Global Retail Director said:
"Energy bills can be complicated, with customer research showing that 6 in 10 people don't fully understand how their bill is calculated. Kilowatt hours, therms and calorific values are not terms that are easy to understand. Energy bills have consistently been voted the most confusing bills that consumers receive.
Currently most people either pay a flat amount each month by direct debit or receive a quarterly bill in arrears. Either way there is very little connection between actual energy usage and how much a customer pays. Both of these factors have helped contribute to many customers feeling disengaged from their energy usage and indeed their energy supplier.
But filling up a car at the petrol station is different. When we top up, we don't tend to think about the 40 litres of unleaded in the tank - instead we think about the £50 that it has cost and how long it will last. Yet we all know that if we travel a bit further or faster than usual, that it will last a bit less than usual. Our fuel gauge then keeps us right in terms of when we next need to top up. Customers are far more engaged with efficiently managing their petrol consumption, and we think that will work for gas and electricity at home.
PowerUp is the start of the age of personalised tariffs, and will use real consumption data to calculate a personal daily price. We believe it will encourage customers to be more conscious of their energy usage, because they will want to make their days last longer."
The launch of PowerUp reinforces ScottishPower's commitment to ensuring that existing customers get access to the best tariffs and products. PowerUp packages will include ScottishPower's most competitive prices, and the 'Big Six' supplier will consider when PowerUp will be launched to the wider market.
Posted on September 23, 2016 at 11:25 AM
September 14, 2016
When a customer falls in to debt with their energy supplier, the supplier can force them on to a pre-payment meter and then charge them up to £900 for the installation.
Energy regulator, OFGEM, has now said that customers who are forced to install prepayment energy meters should be charged a maximum fee of £150. A proposal that has been welcomed by consumer charity, Citizens Advice.
Who does this apply to
As many as 4.5 million people use prepayment meters for electricity, while 3.5 million use them for gas.
Prepayment customers also face higher energy bills. Earlier this year the Competition and Markets Authority recommended that customers on prepayment meters should have their energy prices capped. This will come in to effect in April 2017 and households are expected to save £75 a year as a result.
At the moment, energy suppliers must come to an agreement with a customers that fall into debt. If no arrangement is sorted, then the energy supplier can apply to a magistrate's court for a warrant to install a prepayment meter. If given permission to install the meter then, by law, they can charge for the cost of putting it in. Some suppliers don't charge anything but others can charge as much as £900 when the court costs are included.
The New OFGEM Proposal
OFGEM have suggested that customers who've had a repayment meter forced upon them, should only pay between £100 and £150. The most vulnerable customers, many of whom this applies to, should not pay anything.
Gillian Guy, the chief executive of Citizens Advice said of the announcement
"Capping the warrant charges and ending them altogether for vulnerable customers will help to stop people being pushed further into debt when they are already struggling to manage their costs"
Rachel Fletcher, OFGEM's senior partner for consumers and competition comments:
"It's deeply unfair that struggling customers get hit with high warrant costs when they're already grappling with debt, doubly penalising them. Ofgem's role is to protect every consumer, including the most vulnerable. Suppliers need to help customers manage their debts.
Suppliers need to ensure that PPMs are only installed under warrant as an absolute last resort. Where they are needed, our proposals will protect customers by limiting PPM warrant charges for all customers and removing them for the most vulnerable."
You should be aware that if you're in debt with your current supplier then you can still switch energy suppliers, as long as the debt in less than £500. To find out more about your options call one of our advisers on: 01259 220000. You can also arrange a switch online. Energylinx offer a free and impartial comparison and switching service.
Posted on September 14, 2016 at 02:55 PM
August 31, 2016
There is a new trend emerging in the energy industry, as the UK's "Big Six" Energy Suppliers start to claw back customers from their smaller rivals.
Figures from trade group EnergyUK show that the percentage of switchers moving from a large to a small supplier fell in June to the lowest numbers since March 2015. It's thought that independent suppliers are struggling to cope with more than 20% recovery in prices for winter since April.
With commodity prices bouncing back, the discount that smaller supplier can offer against the bigger suppliers is shrinking and several small suppliers have now put their energy prices up to cover their wholesale costs.
In 2015, wholesale energy prices dropped as much as 30% and small energy suppliers took advantage of this as they were able to slash tariffs. Large suppliers typically buy a few years ahead, locking in prices over a longer period, meaning they can't cut average prices as quickly.
As a result, data from EnergyUK showed that customers rushed to find better-priced deals. In March 2016 a record 206,419 customers switched from a large to a small supplier. A trend that has started to reverse.
In July, RWE won more than 200,000 new British customers, returning its customer base to end-2015 levels. SSE, the UK's second-biggest supplier reduced customers to 50,000 between March and June, from 90,000 lost over the same period last year.
Analyst at Morgan Stanley have a warning for smaller suppliers:
"Over the next few years, after the recent increase in commodity prices, the prevailing conditions may not be so helpful. We expect the independent suppliers to be a lasting phenomenon, but we suspect that it may get tougher for them to continue taking market share as they have done since 2013".
The bank added that small suppliers have also been exempt from many of the environmental charges levied against the largest suppliers in the market, and have avoided the billing issues suffered by suppliers including Npower and Scottish Power.
There is a simple way of finding out which energy supplier could save you the most money and it only takes two minutes. Energylinx is an OFGEM accredited comparison website that compares every energy tariff on the market - ensuring that you don't miss out on the best deal. Click here to be taken to our impartial and free comparison and switching tool.
Posted on August 31, 2016 at 12:42 PM
August 15, 2016
Energy suppliers have been ordered to refunds thousands of gas customers affected by a meter reading error.
This mistake has been caused by energy companies confusing older imperial meter measurements with modern metric ones and it is believed several thousand households have been overcharged.
An OFGEM spokesperson told the BBC that they have written to all energy suppliers to identify any customers that this mistake may affect and to arrange refunds where appropriate. In the cases where customers have been undercharged there will be no further payment.
OFGEM said the mistake had been caused by human error with E.ON being the first supplier to become aware of the problem. The energy suppliers said they had overcharged 350 of their customers. However, other companies may also have been affected. Suppliers have been ordered to identify any customers who have been overcharged by Friday this week.
Industry sources told the FT that some people may have underpaid by 60% as a result of the error but those who were overcharged may have paid in excess of 130% more than they should have.
Trade body Energy UK said firms were "working hard" to address the issue.
The trade association, which represents the major energy companies, said "detailed analysis" showed" an extremely small number of accounts" had been affected.
"Any customer affected will be contacted shortly by their supplier and where there has been overcharging, a refund will be issued as quickly as possible," it added.
Posted on August 15, 2016 at 04:19 PM
August 10, 2016
During the school holidays, UK households are less likely to switch their energy supply - not this summer!
Over 300,000 (333,653) people switched electricity supplier in July, which is a record high for July and a 22% increase from July 2015. This brings the total number of electricity switches to over two and a half million (2,658,437) so far in 2016.
July's data shows 76,174 customers switched to small and mid-tier suppliers in July, which is 23% of all switches.
Movement between Supplier Groups
• 42% of switches were between larger suppliers; British Gas, EDF, E.ON, Npower, Scottish Power and SSE.
• 35% of households switching left a larger supplier to go to a small or mid-tier energy supplier.
• 13% of switches were from small to mid-tier suppliers to larger suppliers.
• 10% of switches were between small and mid-tier suppliers
Lawrence Slade, chief executive of Energy UK said:
"It is fantastic to see customers shopping around over the summer months when energy bills are the last thing on the minds of most people. More than 40 suppliers are offering some great deals especially for those who haven't switched for several years and could potentially save hundreds of pounds. It is easy, safe and quick to switch supplier and the new Energy Switch Guarantee is designed to increase customer confidence in the process."
Wondering what you could save on your energy bills, look no further. Energylinx offer a free and impartial comparison and switching service. Unsure how to arrange the transfer online? Our excellent advisors will go through the transfer for you, just call 01259 220000. Our new opening hours are Monday to Friday 8am-8pm, Saturday 9am-5pm and Sunday 10am-5pm.
Posted on August 10, 2016 at 12:53 PM