31 January marked the deadline for energy suppliers to submit their plans to wake up their customers who are sat on standard variable tariffs. So what’s the score then?
Some of you will recall that after a full two-year long investigation by the Competition and Markets Authority (CMA), last summer the investigation finally concluded.
And it confirmed what we already knew – this market just simply isn’t working for consumers and it’s time for energy companies to accept they need to change.
The crux of problem is that, largely we, as consumers, just aren’t engaged with what’s going on with our energy.
And there could be a number of reasons why this is – such as, not knowing how to engage, difficulty understanding energy tariffs or bills, or just simply, a lack of trust in energy companies.
But, there’s a bigger problem here – and one that we’ve been campaigning on – that those who don’t engage are often the ones penalised for it. This comes in the form of paying out for standard variable tariffs or SVTs.
These tariffs are usually the most expensive tariffs on the market. Our research found that the gap between a SVT price paid with the Big Six is, on average, £111 more than their cheapest tariffs and over 58% of the Big Six’s energy customers are on these tariffs.
Well today, Which? was in Parliament giving evidence to the Business, Energy and Industrial Strategy parliamentary select committee, on what progress we’ve seen since the regulators published their energy market findings last summer.
And we certainly didn’t pull any punches…
— Liz E (@EErrington1) January 31, 2017
Six months after the CMA’s inquiry concluded and energy prices topped the list of biggest consumer worries. What’s more, trust in the sector has continued to dwindle, and the Big Six energy suppliers also found themselves lumped into the bottom half of our annual energy customer satisfaction survey.
From our view, while we’ve seen Ofgem take on the challenge set, and start trialling and testing ways to improve the current situation with our energy, the same cannot be said of the industry.
Energy sector response
It seems that energy suppliers are dragging their feet and waiting to be told what to do by the government or the regulators, bringing into question their commitment to really making this a proper functioning, competitive market that works for its customers.
And that’s exactly why we’ve been calling on energy suppliers to submit plans that show how they are going to help their most disengaged customers, those on SVTs, get engaged and moving onto better deals.
The deadline we set for that challenge is today. We’ve allowed almost three months for energy suppliers to submit their plans – you can see who has responded to our calls on our energy campaign website.
So, after nearly three years of looking at the problems with our energy, we now want the energy sector to start being part of the solution. Their customers have been waiting far too long already.
Update 14 Feb 2017: Suppliers respond
Our latest analysis of Ofgem data reveals that two thirds of energy customers are still stuck on the most expensive deals. As part of our Fair Energy Prices campaign, we challenged energy suppliers to publish plans on how they’d get these customers engaged and switching.
We had 19 responses from energy suppliers and, of those, 14 set out plans to engage their customers, including trialling simpler bills and new ways to make people to switch. Here’s Which? Campaigns Manager Neena Bhati talking about these plans:
Energy prices remain a top worry for consumers, and with the recent price hikes it’s vital that all companies do more to engage with their customers and make it easier to switch to better deals.
We’ve passed all the plans to the government and Ofgem and have called on them to report on progress by the end of April. We’ll also be pressing suppliers to deliver on their plans, and to regularly set out what difference this is making to their customers.
Do you think the energy industry is doing enough for customers? Do you feel the industry works for you?