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.
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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
August 4, 2016
On the back of the two-year CMA investigation in to the gas and electricity market, OFGEM has announced new plans designed to increase competitiveness and make the energy market fairer for all.
According to the CMA's investigation, two thirds of households are paying over the odds for their energy compared to those who have switched suppliers. It warned that as much as 70% of customers were on the more expensive "default" standard variable tariff.
The investigation ended in June and Energylinx think it's great to see OFGEM quickly taking forward the CMAs recommendations to increase competition and reach people who aren't engaged in the market.
By introducing a cap on prepayment meters, the first of OFGEMs changes should save four million UK households around £75 a year. This will begin in April and will end in 2020.
In an attempt to engage customers who don't regularly compare and switch their energy tariff, the regulator will also be trialling more effective prompts to encourage customers to switch.
Proposals include working with suppliers to help "disengaged" customers shop around. As part of this OFGEM has revealed plans to pilot a database service in 2017, which will allow rival suppliers to offer those customers on standard variable rates for three years, better value deals.
OFGEM has plans to roll out smart meters to every household in the UK by 2020, and to make switching suppliers faster and easier and drive down energy bills.
Is it enough?
Whilst any shake-up of the energy industry is welcomed, many have questioned whether this is enough to encourage customers who just aren't bothered about switching their gas or electricity supplier.
Consumers are frequently told of the benefits of switching energy supplier. They hear it from the government, consumer groups, energy suppliers, and energy comparison websites. Yet, for the majority this falls on deaf ears.
"The Disengaged" as CMA refers to them, tend to be on low incomes, have few qualifications, are tenants or are aged over 65. So, pensioners all around the country and those struggling to make ends meet, aren't engaging with the industry. They aren't doing the one simple thing that could have a massive impact on their energy bills and the latest OFGEM report has been criticised for "not going far enough" for them.
Ed Kamm, managing director of First Utility, told the BBC that one problem with the proposals was that they were 'helping those who already shop around and doing little to properly help those who are continuing to pay much more than they need to or should'.
Whilst Which? Welcomed OFGEMs report, they acknowledged the difficulty in establishing the proposals.
Alex Neill, Which? Director of Policy and Campaigns, said:
"After two years of investigation into the energy market it's now time for action, so it's good to see OFGEM swiftly taking forward the CMAs recommendations to increase competition and reach people who are not engaged in the market.
The regulator faces a huge challenge in implementing all of these recommendations in a way that stimulates competition to deliver better outcomes for many more consumers. For this to happen the industry will need to commit to working with the regulator to ensure people get a fairer deal on their energy."
Energy UK agrees that customers need to be at the heart of what the industry does. In a statement, it said:
"Over two million customers have switched (energy supplier) in 2016 so far. There are now 44 suppliers in the market, offering different tariffs for different needs. Prices are now £200 cheaper than in 2014 with over 40 deals under £900."
Without sounding like a broken record, Energylinx recommend that to benefit from a competitive market, you need to compare energy suppliers. Energylinx offer a free and impartial energy comparison and switching service - you will be amazed at what you can save.
Posted on August 4, 2016 at 10:25 AM