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The Big Switch – the results are in!

After months of excitement, we can finally announce it – The Big Switch auction has finished! And the winner is Co-operative Energy! It’s delivered savings of around £123 per year. Great news, so what happens now?

There was a certain part of the office that I avoided on Wednesday – The Big Switch hub – the room where my colleagues who have been working tirelessly over the last few months gathered to negotiate with energy companies.

Tense, excited and armed with spreadsheets and calculations, they had just one key question – how low can you go?

The aim was to secure a market-leading energy deal – something that was cheaper than anything else on offer. I’m delighted to say that they succeeded, and Co-operative Energy bid a tariff that will cost the average household either £1,048 per year (if they pay by direct debit) or £1,144 per year (if they pay by cash or cheque).

As they’re a small company they can only take 30,000 customers, so all the extra people (and we think there’s around 200,000 who fully registered) will be offered the second-place deal, with EDF Energy. It’s slightly more expensive, at £6 more per year for the average household, but still very good value.

Ring in the changes

So what happens next? Well, we could sit around eating cake in celebration, or we could see if there are other areas where Which? can help. Our campaigns team is always on the look out for things we can to make things a bit easier for consumers. If you want to stay up to date with what we’re doing, join our Affordable Energy Campaign. You never know when the next ‘Big Switch moment’ might be around the corner!

Personally, I’m really interested to see what affect this will have on energy bills. Will other companies be feeling the pressure to lower their current prices? Will other organisations (such as ThePeoplesPower) get more great deals on their own collective switching initiatives? I hope the answer to both of these questions is ‘yes.’

But more than that I hope that this leads to some genuine, long term change. Although it’s a great result that we’ve managed to secure these savings for thousands of people, I think The Big Switch represents a more significant ‘cry for help’.

The power of numbers

When we launched I expected fifty, perhaps sixty thousand people to sign up. I was overwhelmed when we passed the hundred thousand mark and even more so when the final total was revealed – more than 270,000 people.

The sheer numbers achieved with this campaign are significant, and not just because these people are all switching but because they’re all standing together and saying ‘we’re not happy’. Not happy with soaring bills, not happy with complicated tariffs, not happy with a market that makes it really hard to find the best deal.

If I were an energy company (other than EDF or Co-operative, of course) I’d be shaking in my boots today. They might be able to pacify regulators or make small changes to appease the government, but when a large number of people take their custom away it shows there’s a real problem.

So what’s next? Do you think we’ll see more collective switching initiatives? Do you think energy companies will make longer term change? I certainly hope so.

[UPDATE 11 MAY 2PM] – Due to popular demand we’re publishing the details of the tariffs for ease of reference. Please note these are averages – your tailored savings estimate will provide the most relevant information to you based on your current energy tariff, usage and location. If you provided your energy details, you’ll receive an email from us in the upcoming days.

You’ll have until 28 May to decide whether to make the switch.

Co-op Variable Pioneer      Tariff Co-op Fixed Pioneer    Tariff EDF Blue+ Price Promise
Avg. Elec Std Chrg – 17.26p     Avg. Elec Std Chrg – 17.26p       Avg. Elec Std Chrg -14.70p
Avg. Elec Unit Rate – 11.99p    Avg. Elec Unit Rate – 10.84p       Avg. Elec Unit Rate – 11.99p
Avg. Gas Std Chrg – 17.26p     Avg. Gas Std Chrg – 17.26p       Avg. Gas Std Chrg – 23.10p
Avg. Gas Unit Rate – 3.77p      Avg. Gas Unit Rate – 3.42p         Avg. Gas Unit Rate – 3.62p

Comments
Mr Frisbee says:
16 May 2012

Nikki, I am sure we all (well most) appreciate your efforts and you are trying to do your best, but as I said on the other thread, the problem is the Spin that Which? are putting on this is damaging your reputation and stoking the fire. Come clean, own up and say that the energy companies have us all by the balls.

We don’t care about the people who have been too lazy to switch for the past 5 years – that is their lookout. What we care about is the result of a collective negotiation that did not work or save many of us very much. Even an average 5% better than the best publicised tariff would have amounted to about £100 each and a lot more for the non-switchers. What you have got is a saving for the non switchers who are too lazy or have more money than sense and most of them will not follow through with the switch anyway.

I propose another campaign called the “Big Switch Off” where all 270,000 of us switch off our lights, heating, tvs, kettles etc and eat cold food for a week in protest at the prices, customer service, misleading tariffs, unreadable bills etc. This is not easy and we are at the mercy of the shareholders for an “essential service”.

Budgie says:
16 May 2012

The Big Switch Off – has a nice ring to it!

Prices, retrospectve price changes, ability to switch in 48 hours without issue, elimination of unfair contract terms etc – all need to be addressed.

Not sure that I could eat cold food but I am willing to give it a try (in the Summer)

So, as Nikki says, the BigSwitch turned out to be little better than an online direct debit deal search for people who haven’t or can’t or won’t do it for themselves.

Maybe it’s time to drop the hype about forcing the big suppliers to drop their prices, and just tell it like it is.

Budgie says:
16 May 2012

The principles were OK, the negotiations, the outcomes and the implementation including Which’s own costs (bunce) etc were clearly sub-optimal.

tom murphy says:
17 May 2012

The Which energy cost reduction project was a relative success but the gain in price reduction is small. What would be more significant and of interest to all those who registered for the ‘big switch’ would be if this arrangement with the Co-op was retained for a period of say three years and was guareenteed to remain a market leader in term of cost. If so I am sure it would attract more than a few hundred thousand potential customers.

Lawrence says:
17 May 2012

The reductions Which got are a joke. How many brown envelopes were exchanged?

JimG says:
17 May 2012

Has anything been done for the unfortunates on tankered propane?

su551e says:
17 May 2012

What a great shame that this initiative has turned out to be something of a damp squib. Like many others who have commented, I see little point in raising the expectations/hopes of a quarter of a million people and then appointing a ‘winner’ who can only accept 30,000 new customers, consigning the rest to a supplier that Which? themselves do not rate, and then trumpeting the rather sad exercise as a success. Perhaps expectations of this initiative were too high. Its success depended on the energy industry playing ball – which clearly it saw no advantage in doing – turkeys voting for Christmas come to mind. For effort I would award an ‘A’. For achievement/delivery a very average ‘C’.

Colin Reddish says:
17 May 2012

I have received my Co-op offer. Wow! it gives me a saving of £1 compared with my current tariff. I won’t be taking it. Personally I prefer the EDF Blue offer. It would cost me about £20 more. However, it is a fixed price tariff but unlike the Co-op offer there are no cancellation charges. In the current recessionary environment I think there could be a trend towards
reduced prices so the opportunity to switch without penalty is worth a little extra IMO.

It’s ironic that Which are offering us the choice of a two Suppliers, one of the worst customer services ratings in the industry and the other without any proven customer service capability. Will the Co-op be able to cope with a sudden doubling of their customer base all at the same time?

The most annoying part of this exercise is that whilst waiting for the results I lost out on a better offer from Scottish Power which has been withdrawn in the meantime.

I’ve just tried the cooperative energy website with my current bill (from E-On) and been asked to switch for £254 MORE a year.

Bit of a boo-boo for Which

Bit of a waste of time for me

Graham61 says:
17 May 2012

£23 is the saving we would make by switching to the Co-op. Add on the cancellation charge of £30 and we would be worse off! However it is a noble effort from Which, but even with a potential customer base of 270,000, the Energy Companies could not really be bothered to beat the prices they already offer, as they know that it a captive market for them and they are relying on our laziness in not moving to another company. The only way we (the consumers) can make a difference would be if we all switched to one company (any one) but again they know it is not going to happen. If we the consumers really want to make a difference then we have all to work together otherwise we should all just shut up and take the medicine.

paul woodhouse says:
17 May 2012

I’m still waiting for my offer email

@paul, me too 🙁

Phil says:
22 May 2012

Despite Nikki Whiteman’s claim, it’s now 22 May and I’m still waiting for an e-mail. However, from the reaction of those who have got their e-mail, it doesn’t sound as if I’m missing much!

Richard Hall says:
17 May 2012

The mood towards bigswitch seems to have turned quite hostile in the last couple of days. After initially positive media coverage, many recent articles and posts have criticised it as failing to meet expectations. So are these criticisms fair?

One recurring criticism is that with the Co-op deal only being available to 30,000 customers some who signed up may lose out. This is true, but misses the point. The Co-op deal is only available at all because Which? allowed small suppliers to cap their offers at 30,000 customers. The reason for this cap is that some of the smallest suppliers are genuinely very small indeed. The Big 6 suppliers serve more than 99% of the households in mainland Great Britain. Co-op, prior to this auction, had only 25,000 customers. They simply couldn’t cope with hundreds of thousands of simultaneous switches and wouldn’t have taken part in the bigswitch if this cap didn’t exist. I suspect that people who criticise the cap mistakenly believe that there was a choice between the Co-op offering this deal to 30,000 customers or to everyone – when actually it was a choice between offering this deal to 30,000 customers or to no-one. Everyone would prefer it if this deal was available to everybody, but would people genuinely rather it wasn’t available to anyone than that 30,000 households end up better off?

A second criticism is that it didn’t provoke any suppliers to launch new tariffs. This is simply untrue – the fixed term deal offered by Co-op is an entirely new tariff.

Then there’s the criticism that a new First Utility tariff that meets the auction criteria is slightly cheaper at standard consumption. This is true, but it was launched after the auction ended. What’s the complaint here? That Which isn’t capable of time travel? Be reasonable.

And there’s a criticism that an old First Utility tariff is slightly cheaper at standard consumption. Again, true, but it was ineligible for the auction because of its product features – for example, because of excessive early exit penalties. Part of the intent of bigswitch and other collective switching initiatives is to try and force suppliers to offer simpler tariffs. So if you try and baffle consumers with unfair small print, you’re out. Personally, that seems like a good thing.

Commission rears its head. Forty quid times nearly 300,000 sign ups sounds like a lot. And it would be, if all the sign-ups converted into actual switches. But they won’t. Experience of collective switching from the Netherlands and Belgium suggests that perhaps only a third of those who provided consumption data to collective switching sites go on to actually take up the offered switch. And you would be paying this kind of commission if you went via a switching site – you just wouldn’t know about it. Which? is a charity, so it’s not like it’s going to be spending any surplus it makes on dancing girls and landmines.

Some people are currently on a better deal, in most cases because its a discounted fixed term deal that’s yet to run out. Good on you; stick with it.

Some people will have better priced deals available at their consumption level. This is inevitable because everyone consumes different amounts of energy and the absence of much regulation means that suppliers can configure their tariffs pretty much any way they like – so the best deal at national average consumption may differ from the best deal at half or twice that consumption level. But the email you’ll get from Which? will set out how much the bigswitch deal would cost you at your consumption level and will tell you whether there are any alternative better deals. And if there aren’t; don’t switch, you don’t need to.

Finally there’s the accusation that its failed to shake up the market. I don’t agree. We’ve seen an ethical customer-owned small supplier doubling in size overnight. We’ve seen a demonstration that low carbon energy doesn’t have to cost the earth – Co-op’s carbon intensity is less than half of the Big 6. We’ve seen an articulation of the fallacy that prices can only go up; ironically the result and the separate First Utility price cut were announced on the same day that British Gas signalled impending price rises. And we’ve also seen a proof-of-concept – that collective switching can work in the UK. It’ll have teething problems and won’t be flawless – Which? certainly appears to have struggled with the logistics of it and I doubt they’d run it the same way again – but it’s a step in the right direction.

Mr Frisbee says:
17 May 2012

Richard, I do think you are looking at this with slightly rose tinted glasses. Many of us have read the information that you highlight above and some may not, but the bottom line is we were led to believe that the deal was – here are 270,000 people, if we can get 20% or more to switch to you what rate would you offer. They pretty much said, here is our rate card, we will offer them any one of these. Well, any of us could have done that without the need to spend loads of money (I believe Which? estimate this to be over £500k).

The whole thing promised too much and delivered way too little. There is no getting away from that. The energy companies are not doubt laughing all the way to the bank.

It is time the Government stepped in and told them to make pricing and marketing transparent. In the same way there is an APR for financial interest, there should be something similar for gas, electric and probably telecoms products too.

Budgie says:
18 May 2012

@Mr Frisbee – agreed

Add to this the absolute need for consumers to be able to switch pretty much Instantaneously – say within 48-72 hours – and on settlement of a final bill by EFT or other payment.

The energy companies must be made to come to the party on this issue as it is the switching process itself which prevents consumers excersising any purchasing power they have in this rigged “market”. This should be imposed by Offgen and Government now. No excuses. No consultation. JFDI.

George says:
17 May 2012

I switched to the co-op when they started selling electric and gas. I did it for transparency and service not just the money. So far they have trumped any of the many other utilities I have tried in the past Stop moaning and give the co-op a proper chance to show you what they can do – suppliers are partners – if you just want cheap go to Ryanair.

Rob says:
17 May 2012

I’ve switched. The Co-Op’s offer was £66 cheaper than the plan Scottish Power were pushing us to switch to and £19 better than Scottish Power’s cheapest plan. They also beat First Utility’s new tariff by £16 and EDF’s Blue+ Price tariff by £36.

Which doesn’t deserve criticism; at least they tried. Up against the Big 6, there wasn’t much hope in the first place. Save your anger for the Big 6, government and the so-called regulator, Ofgem. They’re the problem here.

i have not received a quote yet, please can you advise when i am likely to receive one after which i will comment / respond accordingly

Ian Barnard says:
18 May 2012

Hi,

I’m still waiting for my e-mail too. When is it likely to arrive?

Alec says:
18 May 2012

Hi,

Just got my offer. I’m currently with EDF Energy with Online S@ver Version 9. I’ve just done a quick calculation on the percentage increase in the tariffs charged. The electric increase is 58.25% and the gas is 29.34%. Did I just have a very good deal before in comparison to the” Blue +” offer?

The fact you’ve had your email and got those %ages, I dread to think what my %ages will be as I still don’t have the email, which should arrive later today.

John Symons says:
18 May 2012

Alec, did Which? actually send you an offer with negative savings, i.e. cost increases, in the order of £213 for electricity and £157 for gas? I would have thought that an abject apology would have been more in order. Or did they calculate your savings/increases incorrectly, i.e. not in line with the tariffs?

John Symons says:
18 May 2012

Paul Woodhouse, William, Nikki Whiteman, offers in order of who can save most where? I received mine 2 days ago, which suggests that current email recipients will have savings of well below £126 (Coop)/£145 (best). NB if I counted the Coop 1.5% dividend, they were better for me than the “best”.

Alec says:
18 May 2012

John, it indicates my current tariff and the new one with Blue +.

Electric is now 8.12p and with Blue + it will be 12.85p

Gas is now 2.975 and with Blue + it will be 3.848p

Don’t forget to compare the standing charges, which sadly make up a fair portion of my bill. Gas its 49%, leccy its 21%

John Cudbertson says:
18 May 2012

One piece of information that was not asked for in the original submission; did you receive any form of loyalty reward from your supplier? Yes I did, Atlantic paid back a whole month’s payments without any prompting from me, plus they returned all of the excess payments. This means that they are substantially cheaper than the recommended supplier, so I won’t be switching.

Len says:
19 May 2012

I have not received an email yet can you let me know when I should expect it please ?