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Co-operative Energy: what The Big Switch means to us

a big switch on red background

This week we announced the results of The Big Switch – Co-operative Energy won with the cheapest tariff on the day of the auction. In this guest post, Nigel Mason of Co-operative Energy explains what it means to them.

When we launched Co-operative Energy 12 months ago we promised to challenge the big six and, most importantly, champion a fair deal for customers. In our first year we have attracted 25,000 customers and proved to the rest of the industry and to the public that it is possible to operate an ethical energy business which has its customers’ best interests at heart.

United buying wins the title

Last week we were successful in winning The Big Switch auction. We beat bigger, more powerful players to offer the most competitive energy deal in all three auction categories – online direct debit, offline direct debit and the cash and cheque category – proving undoubtedly that we are highly competitive and that our values, the things that we believe are important, are important to customers too.

So we have proved that we were the cheapest option on average as part of the auction.

We were pleased to win The Big Switch – not just for offering the most competitive price but so that more of you can join us in our mutual business model. We’re the only energy supplier wholly owned by our customers which means if you obtain your energy from us you share in our profits and are instrumental in how we’re run.

So if you’re one of the new customers who joins us via the Big Switch you will not only be making big savings on your energy bills – over £200 for those on the worst value tariffs – but you will also receive a twice-year dividend.

Power to the People

United buying, where customers get together to increase their buying power, is at the heart of the co-operative model, which is why we were keen to be part of this first, large-scale collective buying scheme.

There’s a huge difference between united buying and mass serial switching – a practice encouraged by some in the industry, where a small number of customers hop from one loss leading tariff to another. That may be good for very active switchers but is terrible for everyone else who has to subsidise their savings. And it adds a new tier of cost to bills that are already hard for people to stomach.

Ultimately, the more people who join Co-operative Energy, the stronger our purchasing power and the more clout we have to compete against the Big Six and continue to offer a better energy deal for all.

Which? Conversation provides guest spots to external contributors. This is from Nigel Mason, Business Development Manager at Co-operative Energy all opinions expressed here are their own, not necessarily those of Which?

Comments
Member

Co-operative Energy says above “So we have proved that we were the cheapest option on average as part of the auction”. Now the key words in that sentence are “as part of the auction”.
Co-operative Energy were indeed the cheapest bid in the reverse auction but most of the energy supply industry declined to take part. So the “Which” objective of finding a “market leading deal” was not achieved. There remain cheaper options out there, tariffs on offer which were already there for anyone to go for.

Now I don’t want to knock “Which” for trying, or want to knock Co-operative Energy for coming up with a tariff better than most, but I am a little irritated that this exercise has been seemingly claimed by “Which” a resounding success when it most clearly has not.

A better fairer comment from “Which” on the conclusion of the “big switch” would have been:
“Well we tied, Co-operative Energy was the best bid from the minority of energy suppliers that took part, but any market leading deal has eluded us. This is the nature of the energy supply industry and we’ve learnt from it”

That I feel is a fair summing up, not the spin “Which” is spouting right now.

Member

Hi Chris, that’s not really right – The Big Switch beat existing deals on the market, with Co-op creating a new tariff that beat the others at the auction. We made it clear to all energy companies that all Direct Debit tariffs had to be a fixed rate for a minimum of 12 months. There was only one tariff on the market that was slightly cheaper on the day of our reverse auction, and that was a variable rate.

We want every potential switcher to be as confident as possible that the deal they switch to won’t suddenly be hiked up. When one major supplier has already warned of future price increases, we think it is irresponsible to recommend a deal that could go up at any time when the price difference is relatively small (£21 on an average bill of around £1270 a year).

Member

“Hi Chris, that’s not really right”
Well Nikki what did I say that isn’t true?
Perhaps to clarify I’ll say this was a worthwhile effort by “Which” and it certainly highlighted that savings are there for those prepared to make the effort and switch.
But remember all the hype as the “big switch” initiative was taking off, remember all the comments from “which”, some from yourself.
“Market leading deal”
“new way of buying energy”
“Really shake up the energy industry”
You must see how expectations were raised and how people will be a little disappionted with the final result, especially as only 30k of the 250k of signees get the best deal with the remainder only being offered a deal available to anyone big switch or no big switch, and even then not actually the cheapest available.

I’m not blaiming “which” because it didn’t happen quite the way intended, I didn’t think it would and we all should know what energy suppliers are like by now what with regional differences and the myriad of tariffs designed to make supply appear cheaper than it really is or cheaper than the competition when really it’s not.

It’s just that “which” still appears to be claiming a major success when nothing is on offer better than that which already existed. A visit to “switch with which” will confirm this.

It was a good effort but not the success now being claimed.
You’ll have my support if you come up with other ideas to get everyone a better deal, but please just tell it like it really is.

Member
Eileen says:
19 May 2012

Chris I think you work for one on those large rip off energy companies

Member

Eileen,
“Chris I think you work for one on those large rip off energy companies”
No I don’t, and I really cannot think that anything I said could make you think that. Perhaps you might explain how you came to such an inaccurate conclusion?
I want the best deal for everyone. Energy companies and their share holders are doing very nicely at everyone else’s expense.
I’d like to see the next “Which” campaign one that promotes re-nationalisation of all basic utilities, with an independant overseeing body to ensure efficiency and fair, low pricing. This market force approach is clearly not working.
I’d also like “Which” to tell it like it really is, because on this particular issue for reasons best known to “Which” I don’t really think the “big switch” conclusion is quite as “which” is saying it is.
Never the less I applaud “which” for trying and I congradulate Co-operative Energy for coming up with a deal better than most, but “revolutionise the way we buy energy”, “shake up the industry”? Don’t think so.

Member
Mr Frisbee says:
16 May 2012

I am with Chris here. The problem is the “spin” that Which? are putting on it – it does seem rather out of character. Well done for trying and I know you have a lot of costs to cover for the exercise. For many you will have prompted them to get off their backsides and switch (and save), but for others and for making the industry stand up and listen, it has not worked. I for one can change to the EDF tariff (which for me at least is about £182 less than the new Co-op rate). Co-op has done the best out of this as they will probably get 30,000 new customers in one foul swoop.

Nikki, please do not spin this any more, yes, you may have saved £25m which is a “headline” figure but that opportunity was already there for about 90% of people (perhaps 100%). What is the incremental saving of the project for those of us who know how to use the internet and can read (just about) our bills? Not a huge amount if anything at all – the only reason you can claim to have saved me money for example is because I have been on the EDF standard tariff for about 3 months waiting for this Big Switch to offer some Big Savings – it does not do it for me or many others.

Member
JS says:
16 May 2012

I agree with Chris and Mr Frisbee. It was a good try but I have just checked what tariffs are available to me on Which? Switch and there is a much better deal from first:utility which is fixed until September 2013. The Co-operative deal does not even save me anything if I stay with NPower for a few more months and get the £100 DD discount.
This exercise will have helped many to make the effort to switch but not those of us who already switch regularly.

Member
Martin G says:
16 May 2012

This is typical cartel behaviour being unwilling to genuinely compete. The individual small customer does not make much difference. I am a school governor and the school buys energy at serious discount through a consortium set up by a County Council (out of our area as it happens). The way to do this is to have really large numbers of consumers in groups like local authorities. Remember how the insurance companies backed down when councils challenged their refusal to offer contents insurance on some council estates by saying it must be buildings and contents for all our dwellings or none.

Member
Maneesh says:
16 May 2012

I haven’t heard anything about my options yet. When are Which going to email members who had applied for the “Big Switch”? Should I assume that I have not been able to find a cheaper deal?

Member
Maneesh says:
19 May 2012

Still no emails yet, thanks very much Which, for getting me to give you all details of my energy usage, with not even so much as a “sorry can’t find you a better deal for you”.
Guess thats it for me then, I’m off to uswitch to do my own comparisons.
– from, a Which member for 10 years.

Member
Peter Dudley says:
16 May 2012

I received your email about the results of the Big Switch unfortunately when I try to open it it says it can’t as the email is corrupt.
What do I do now?
How do I find out if I will benefit?

Member
Mr Frisbee says:
16 May 2012

If you read the thread above and others on here, you go to Uswitch and see what is on offer. It will be at least as good as the corrupt email you have, probably better!

Member

Hi Peter – sorry about that, not sure what’s happened. Could you forward it on to consumeraction@which.co.uk and I’ll investigate? Thanks!

Member
Disapointed says:
17 May 2012

Seriously disappointed by the BIG SWITCH. In reality it has been a big let down and actually costly excersice for many fo us who could have switched earlier and saved money, but held onto the belief the Big Switch Deal was worth waiting for.

I hoped it would at least be able to beat the prices you can get on price comparisson sites, but it simply doesnt, in my case it is way of the mark

This isnt really the fault of Which, just the same collusion of the big energy companies not to take part in any activity that might bring prices down.

The only potential good thing i can see is it might help the CO-OP become a decent competitior in the market. However if they simply join the cartel this additional competition will count for nothing.

Member
Stephen says:
17 May 2012

So, a worthy effort, and you’ve persuaded at least one “first-timer” to switch. However, to really succeed, Which? now need to ensure that this is not a one-off exercise – it needs repeating at regular intervals, so that you can buid up a momentum, and hopefully an increasingly powerful body of switchers.

Member
Mr Punch says:
17 May 2012

All the above comments are valid and I agree Which shouldnt put such a spin on the success. However it would seem that the benefits of this would also depend on your location, as the CoOp tariff did actually come out the best for me personally – and I have also compared against all the others via USwitch. For me the CoOp tariff saves me £110 per year, while the next closed was £94. So personally it was well worth it. Thanks Which.
I do also agree that I hope this isnt just a one off and that you will repeat it in the future – learning the mistakes from this one.

Member
Bob says:
17 May 2012

I registered for the big switch. My energy providers contract came to an end so they put me onto their standard variable tarriff.
In the meantime, I tried ‘switch with which’. The result based on my useage, showed a far cheaper company…I decided to switch than wait.
Now we have the results, I am glad I did. The alternative to the Co-Op is well below in the switch results I was given.

Member
Joy, Wolverhampton says:
17 May 2012

I’m disappointed to read some of the emails. I know we all want to save money but for me – and I am not earning a huge amount, LESS than than £18,000 a year before anyone comments on the cost – it is company ethics. For me it’s important to know that the money I am paying is not going into the pockets of rich shareholders or paying morally wrong huge bonuses to directors; and not being invested in companies and countries which are not ethical or treating their workers/citizens badly.

Member
JohnP says:
17 May 2012

My offer arrived today and having compared it to all the Uswitch offerings it is the cheapest provided that it includes VAT (which is to be seen nowhere in the quote).

I do hope I can switch to the co-op as I am a Member, but I need to guarantee that no switch will occur till mid June – else it will cost me a hefty exit fee.

Member
Michael Clark says:
17 May 2012

Hi Nikki,
Your email (dated 11/05/12) re. auction results reached me today (17/05/12) but I have yet to get my “tailored” quote. Having gone to the trouble of providing you with all my data, it would be nice to know whether you are able to show me a saving and, if so, when I need to apply in order to be amongst the 30,000 or is it already too late?
Regards, Michael Clark.

Member
David L says:
17 May 2012

like i stated in my post below, I didnt get a “Tailored Quote”… Which? have somehow managed to gather a lot of information from us all, which can earn then a lot of income… gee thanks Which?

Member
David L says:
17 May 2012

Well I must say that I am dissapointed that such an unethical company (in my, and other family members opinion) like “Co-operative”- energy managed to win this reverse auction. I say unethical as I know several folk who work for them, and are treat unfairly. As for being notified by which, well I for one didn’t receive an email, let alone a corrupted one. Todays newsletter, was the first I heard, even though I signed up to “the big switch” and provided my energy consumption details months ago. A few posts mention EDF energy, who I am currently with, being cheaper. So for me its been a pointless exercise. I feel this has been a complete waste of time, as the only provider to compete, was the most expensive for me. Just goes to show how dishonest the energy providers are. One last point here, didn’t I hear that if which were to refer customers via the “big switch” that they would expect to earn £40-is in commision?

Member
ken says:
17 May 2012

Which, Supermarkets, Banks, Oil, Electric, Gas, Car, and Water companies etc., have no competitiors they operate cartels or are monopolies. And what is catastrophic our politics are in their pockets.
Have a nice day.

Member
Russ Lyon says:
17 May 2012

I am a Which subsciber who registered for the big switch but have not had a personal quote. What do I do to get one?

Member
Shirley says:
17 May 2012

Well here is one very satisfied customer. Having not had the time or nerve to be bothered to switch before, even though I knew I was getting a poor deal, I have received my quote, signed up with Co-operative and expect to save £276. Well done Which? You’ve done a great job.

Member

Thanks to all for your comments and thoughts – Shirley – delighted that you’ll make such a big saving.

For those who haven’t received their email yet – you should get it by the end of the day today. They’re being sent out in batches according to who can save most where, and you’ll still have plenty of time to make the switch if you want to.

David L – you won’t receive any communication (outside of that directly related to The Big Switch) unless you deliberately ticked a box to opt in to it. There was also a box to tick if you want to get a monthly update on campaigns – again, you won’t receive this unless you asked for it. You can, of course, opt out of these emails at any point. Re: commission – we do get commission, and the details of this are on our ‘frequently asked questions’ page on The Big Switch website, as we’re committed to being really transparent about this. It’s worth reiterating that we are a charity – this money goes to cover our costs and if there’s any extra it will go to support our affordable energy campaign. This campaign aims to tackle a lot of the problems that people have brought up in this convo and others – the complexity of tariffs, inflexibility of the market etc. Tariff complexity is one of the things that we’re working on at the moment – we want to make tariffs simpler so that it becomes much easier in the future to work out whether you’re getting a good deal. You can see more info on it here: http://www.which.co.uk/campaigns/energy-and-environment/

Member

I have not received any offer. When will I receive one?

Member
Chris M- Nottingham says:
18 May 2012

I appear to save £80 a year by switching on the big switch, approx 8% of my energy bill. I am delighted and pleased a company like the Co-op has won this. I was sick of n power wildly altering my direct debits when recalculating by usage.

Also the Big six have consistently proven they are making their tariffs incomprehensible and not easily comparable. When i have used u switch, i have been stung by increased costs for gas usage over the winter months, that raise the rates you think you are getting initially.

Well done Which!!!! Good start, whats next.

Member
Norman Naylor says:
18 May 2012

Received the quote, completed the forms and made the switch. It’s unlikely any takers will get a deal anywhere else that will be better by a worthwhile amount. Some respondents are, I think, missing an important point. If enough of you switch, the other suppliers will sit up and take notice. You’ll be helping to drive down energy costs and increase competition, especially as the end point of the fixed term approaches. Go for it!

Member
Eileen says:
19 May 2012

Everyone should switch from those large energy companies on principal even if you are not getting a good deal.Last year I switched from British gas and I swear I will never EVER go back to them even if they were the cheapest on principal.I have not got around to switching to the Which / co op energy yet but I will even if it’s not saving me money.Hope in time more people can see that it’s not the money but the principal.Those large energy companies are greedy and lining their pockets especially the directors and chief executives.Which you should try harder,I don’t think many people know about your campaign unless they are with Which.Can people who are not with Which join in?Lots of pensioners don’t have computers to join your Which campaign and it’s us who need help most with cheaper energy.Which you should make it more user friendly and also for people who don’t want to use computers but just want to fill a simple form to join in your switch campaign.

Member
Chris B says:
19 May 2012

I have not received an ‘e-mail’ with my options – how do I ask for a quote as there does not appear to be any applications on the Which? website?

Member
Anne B says:
19 May 2012

Very good idea, though I had an idea that Ebico could not be beaten in my case.

I did receive an offer to join the Big Switch but, when I looked into the figures Which provided, I found they were giving wrong ones for Ebico elec in my case. I am in the South East and was quoted over 20p/kWh when, in fact it is over 17p/kWh. Thus my savings were ever smaller.

I tried to phone to point out the discrepancy but held on for 7 mins and gave up.

So I await the next Big Switch, ever hopeful.

Member
Ed says:
21 May 2012

Norman and Eileen have got it. It is not only about money but about bringing pressure to bear on the big six who have been ripping us off for far too long. Big profits for share holders will always take priority over fair deals for customers. The big six operate the same as the banks. Not a lot of choice. Same big interest charges same measley saving rates. If which can’t achieve an outcome then lets re-nationalise energy and keep the money within the industries and not to providing fat salaries and pensions to the chosen few.