February 26, 2018
The plans for a price cap on energy bills was introduced to Parliament today. The Government has claimed that this will save 11 million households up to £100 a year.
The regulator, Ofgem, will be allowed to limit standard variable tariffs until 2020 under the Domestic Gas and Electricity Bill. Following that, the cap may be extended on an annual basis until 2023.
The government said the Domestic Gas and Electricity Bill should be implemented by Ofgem "as soon as possible so that customers get the protection they need by the end of this year".
Rachel Reeves, who chairs the Business Committee in the Commons, said:
"Energy consumers have been overcharged for too long and the government now needs to quickly ensure this legislation is passed in time to protect customers next winter."
The energy industry has been reacting to the news today. Energy UK, the trade association for the UK's energy industry, has said that the energy price cap must reflect energy suppliers' costs, most of which they believe it out with the suppliers control.
Lawrence Slade, Chief Executive of Energy UK, said:
"With a record one-in-six customers switching last year and over 60 suppliers to choose from, the energy market is changing rapidly and has never offered so much choice. It's vital the cap doesn't halt the growth of competition which is helping customers to find a better deal and save on their energy bills."
Greg Jackson - CEO of Octopus Energy - one of the lead challengers who fought for the price cap said:
"As the energy company that has led the campaign for an energy price cap, we are delighted the government is bringing forward this vital legislation.
The power imbalance between customers and companies has stifled competition and led to rip off prices and cynical loyalty penalties which we hope the government will also address with this legislation."
About a third of UK households are charged a variable price for their energy at a default rate set by their energy company, because they have not chosen to shop around for a cheaper fixed-price deal.
If you are on a standard variable tariff then are probably paying too much for your energy and could save money by switching your energy supplier. Energylinx offer an impartial energy comparison and switching service. You can compare energy tariffs and see what you could save online or by calling one of our advisors on 01259 220000.
Posted on February 26, 2018 at 12:25 PM
February 22, 2018
British Gas' owner, Centrica, has announced they are cutting 4,000 jobs and blamed political meddling in the UK market for its "weak" end to 2017.
Last year British Gas lost 750,000 domestic energy customers. Bringing their total amount of customers down to 7.8 million - roughly 9% down on 2016.
Centrica also operates in North America and Ireland and have said that group's profits dropped 17% to £1.25bn. Despite the fall in profits for Centrica Group as a whole, British Gas, which supplies energy to UK homes and businesses, saw profits rise 3% to £572m.
Centrica said the job losses, which are part of an extended cost-cutting programme, would fall mainly in its UK energy supply business. The energy giant has already scrapped 6,000 roles in a fight to remain profitable in the face of tighter regulation, mounting competition and rising energy costs.
Iain Conn, Centrica's Chief Executive, said plans for a price cap in the UK was one reason for the job losses. Mr Conn also expressed his disagreement with the Government plans to cap prices, arguing it would reduce choice.
"We will clearly be wanting to discuss all the details with the government. We don't agree with it. We hope it doesn't happen because we think that ultimately it will be bad for customers."
Centrica said that the total number of customer accounts at British Gas fell by 1,376,000 (10%) during 2017. As many of its customers have more than one account - for example, many households have dual fuel accounts - this decline amounted to the loss of 750,000 customers.
Posted on February 22, 2018 at 11:42 AM
February 21, 2018
Ofgem has launched an investigation into UK gas and electricity supplier Iresa over its treatment of customers.
The energy regulator will look into the Nottingham-based firm's customer service processes to determine whether the firm treated customers fairly in their call-handling and complaints process.
It will also examine whether Iresa gave adequate notice to customers facing financial difficulty that debt repayments were being taken out of their bank accounts.
Customers have complained about their struggles to get in touch with the company on different social networks.
Citizens Advice raised concerns with Ofgem over the high level of complaints against Iresa and the consumer association, Which?, reported concerns they had about Iresa at the end of January. At the time Which? said that they had received a high volume of reports from Iresa customers who were facing a surprise direct debit increase or a one-off payment of hundreds of pounds.
Iresa stopped taking new customers temporarily in early 2016, after Ofgem found that customers were having trouble getting in touch with the energy provider.
Energylinx would like to invite all unhappy Iresa customers to use our platform to see what other options are available to you. You can compare energy suppliers online or by calling one of our lovely energy advisors on 01259 220000.
Posted on February 21, 2018 at 02:19 PM
February 15, 2018
Citizens Advice is calling for more stringent checks on small energy suppliers after the collapse of Future Energy last month.
Citizens Advice said that some energy suppliers are not able to meet the "minimum standards set out in the supply licence" and has asked regulator, Ofgem, to change the licensing process.
It is their experience working with newer suppliers, that some companies do not have the systems in place to meet the minimum standards set out in the supply licence. Citizens Advice said over the past year Ofgem has tightened up its monitoring of new suppliers, but they haven't made any changes to the licensing process itself and it's time they addressed this.
Citizens Advice argue that Ofgem should ensure new entrants into the market should have four key things in place before being able to start offering energy to the public:
1. Considerable financial investment in staff and systems
2. A realistic business plan
3. Experienced staff
4. Clear evidence that the company understands energy is an essential service
Citizens Advice said that Future Energy ceasing trading was disappointing, but not surprising. A report in The Times claims that early estimates show Future Energy customers could be owed up to £250 each. The company is thought to have had "credit balances" of about £2.5 million from existing customers and £500,000 from past customers.
Future Energy's 10,000 customer base has been taken on by Green Star Energy. Ofgem said all customers will have their balances protected as part of the safety net process.
A spokesperson for the regulator said:
"Now Green Star Energy has been appointed they will work with the administrators of Future Energy Supply to work out the exact amount of credit balances, using more information from their billing and other systems."
Posted on February 15, 2018 at 11:37 AM
February 13, 2018
A report from MPs says that the government's planned cap on energy bills should be introduced before next winter, to stop loyal customers from being overcharged.
Competition in the energy industry is not working for 12 million customers stuck on poor-value tariffs, said MPs on the Business, Energy and Industrial Strategy (BEIS) committee.
Rachel Reeves, Chair of the Business, Energy, and Industrial Strategy Committee said:
"The energy market is broken ... an energy price cap is now necessary and the government must act urgently to ensure it is in place to protect customers next winter."
The Committee said the cap should be an absolute price limit rather than a relative cap which would limit the difference between the highest and lowest prices charged by each energy supplier.
The committee was also critical of the big six energy companies for overcharging customers, who can pay as much as £300 a year more than those on cheaper tariffs, and Ofgem for being slow to act.
Rachel Reeves, Chair of the Business, Energy and Industrial Strategy Committee continued:
"The Big Six energy companies might whine and wail about the introduction of a price cap but they've been overcharging their customers on default and standard variable tariffs for years and their recent feeble efforts to move consumers off these tariffs has only served to highlight the need for this intervention."
The committee found that energy suppliers too often target new customers with cheap deals to encourage them to switch, while making big profits from "sticky" customers on expensive variable tariffs who switch rarely or never.
Energylinx would urge any customers on a standard variable tariff to compare the market and see what energy suppliers could save you money. Energylinx offers an energy comparison and switching service. It's free, easy to use and completely impartial. You can do it online or by calling one of our friendly and knowledgeable energy advisors on 01259 220000.
Posted on February 13, 2018 at 12:15 PM
February 12, 2018
The industry body, Energy UK, is launching a new Commission for Customers in Vulnerable Circumstances to explore how standards of care and support could be improved. The Commission will be involve representatives from across the business, charity and consumer advice communities and be independently chaired.
In the coming weeks, the Commission will publish a call for evidence and will hold hearings around the UK to hear from the broadest possible spectrum of stakeholders - from consumer groups, those representing the elderly and people with disabilities, experts on financial vulnerability and mental health charities among others.
The Commission will consider the different aspects of vulnerability and how they can impact a customer's ability to engage with the energy market as well as consider how the actions of suppliers, government departments, Ofgem and other stakeholders impact on the overall level of care and support for customers in vulnerable circumstances.
Energy UK will be separately developing a new Vulnerability Charter to build on existing voluntary commitments and go further to support customers most in need.
Chair of the Commission for Customers in Vulnerable Circumstances, Lord Whitty, said:
"Vulnerability of all kinds present a range of challenges for the energy industry and I'm pleased to have the opportunity to take on the role of Chair of the new Commission to explore how energy suppliers, and wider sectors both public and private, can best serve, support and protect customers in vulnerable circumstances. I look forward to working with all concerned to progress this vital work, and to build on the hard work and progress made so far by the energy sector."
Lawrence Slade, chief executive of Energy UK, said:
"Identifying customers in vulnerable circumstances and providing the appropriate support customers need, and want, is a challenge that is not unique to energy companies - across our society we need to take huge leaps forward in recognising and responding to the impact of vulnerable circumstances. These can be difficult to identify, are often complex, and can be temporary or permanent."
"The launch of the Commission is an important further step forward for the energy industry that believes strongly in improving customer service and support for all consumers, particularly those most in need."
Posted on February 12, 2018 at 03:36 PM
February 7, 2018
Energy regulator, Ofgem, has said that five million of the UK's most vulnerable households are facing an average rise of £57 on their annual energy bills.
The increase will bring the price of the average dual fuel bill of those who have their bills capped to £1,089. This is up from £1,031.
The cost of producing energy is expected to rise in the spring and Ofgem said savings under the current price cap will be reduced from April.
Around four million people with pre-payment meters already have their bills capped and Ofgem extended the safeguard tariff to an extra one million households who currently receive the warm home discount earlier this week.
The extra million households will start by saving £115 a year, but from April the savings will be reduced to an average of £66 a year.
Those eligible for the latest cap include those with low incomes and some people over the age of 65.
Dermot Nolan, Ofgem's chief executive, said
"Protecting vulnerable customers is a priority for Ofgem. Even when energy costs rise, people on the worst deals are better off under the safeguard tariff as they can be sure that they are not overpaying for their energy, and any rise is justified."
The industry body, Energy UK, has responded to the Ofgem announcement Lawrence Slade, chief executive of Energy UK, said:
"That the cap will rise from April does show how energy costs, which are out of any suppliers direct control, are increasing and underlines why it is critical any broader cap must be cost-reflective and protect competition which is delivering benefits for consumers."
It is possible that households on the safeguard tariff could save more money by switching to a cheaper energy deal. Energylinx can compare all the energy suppliers on the market to find customers the best deal. You can do this online or by calling one of our advisors on 01259 220000.
Posted on February 7, 2018 at 12:24 PM