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Energy suppliers respond to our campaign – what do you think?

Energy deadline

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.

Disengaged customers

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…

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?

Comments

I do not think the energy sector is doing enough for their customers. We are supposed to live in a civilised society but allow the most vulnerable members of society to be exploited. Many of us are perfectly capable of finding the cheapest deals but that pushes up prices for those who are unable to – many in later life, those preoccupied with illness, and so on.

The door is wide open for many customers on standard variable tariffs to save significantly on their bills. Just change to a different tariff – usually a fixed term fixed price – selected by using a site such as Which? Switch. That would immediately benefit a huge number of customers. All the research to date has shown that many people are quite capable of doing this, but simply decide not to, don’t bother, don’t worry about the saving.

However I say “many” customers because there are those who cannot, for various reasons, make this sort of switch. They need to be helped by family or organisations (CA perhaps) to make the change. Which? could use some of the money it currently spends advertising on TV promoting the advantages of switching, and its on-line and telephone service.

I’d like to see these fixed price cheaper dealers stopped, however. They are subsidised by those on svt so get rid of them and the svt deals should reduce significantly in price. You’ll then just be left with other choices that will still affect what you pay- which supplier, off peak, gas from one and electricity from another, for example – but the differences compared to now should be much less. It is a commercial industry – companies differ in their efficiency and costs, they buy energy from different sources and forward buy in different ways – so there should always be price competition. We cannot expect energy suppliers to promote their competitors. As in buying most things, individuals have a bit of research to do and choices to make if they want the best deal.

Perhaps we might focus some of this Convo on how we can help those who are not able to switch to a better tariff without some assistance. These are the people who will suffer financially without the means of finding a way out. Has anyone any practical experience of helping people like this?

That very much has my support, Malcolm. Many of us can only know what it’s like to be unable to heat their homes adequately when their heating breaks down – as mine did today. 🙁

I’m sorry to hear about your heating. What happened? Boiler? At least it is a little milder for a few days.Hope you get it fixed quickly though.

Thanks Malcolm. I thought the boiler had failed but it was just the pump. In theory you close the isolation valves, disconnect the pump and replace it. After struggling for an hour I called the local plumber who was busy but kindly offered to lend me the proper tools for the job, but not the strength needed. 🙁 Tomorrow is another day, I have other heating, and as you say the weather is mild. Oops – off topic.

There is a good deal of activity led by Ofgem to look at the way the retail markets work. Consultations have been held and continue with interest groups – consumers, third parties and suppliers. The current proposals just out for consultation: https://www.ofgem.gov.uk/system/files/docs/2017/01/statutory_consultation_informed_choices.pdf

I could not see Which? mentioned, nor did they appear in the list of stakeholders. I hope they are represented but if not, then they should be. Unless we take part in these formative processes we will not necessarily get the results that we would like, and given Which?’s feedback through energy Convos over the last couple of years, they have a good deal of consumer comment to pass on.

@neena-bhati, can you reassure us that Which? are an active and current participant in the Ofgem consultations and are putting across the views of commenting consumers as well as your own?

Thanks @neena-bhati, for the reassurance. I have from time to time contacted Ofgem directly with questions and suggestions. They have always responded positively. As you say, consumers can have their say directly. However, if there is a majority view then it is better to come from an organisation such as Which?.

If we want fairer but more uniformly higher energy prices, we could campaign for an end to fixed price deals.

I think that will help improve fairness – because we’d then all have to be on SVTs, but not in a way that would be of any great financial benefit to the poor and needy.

Folk stuck on a single supplier’s SVT would still be stuck there, but, in the medium to long term, there may be some slight downward movement of the SVT prices, because they would then be the only means whereby suppliers could compete on price.

But to really foster a competitive market, it needs to become impossible for anyone to stay with a given supplier for life by default.

I would like to see contracts scrapped completely unless your switch includes the purchase of something e.g. a mobile phone.

Where you are only switching a service on equipment that already exists, why do companies insist on contracts? With a mobile phone, you can switch suppliers on sim only with no contract so it is possible.

Sky won’t switch my landline to Sky unless I take out a contract and they are already using that line to supply broadband so why is a contract necessary?

So why not the same for energy? Why do people need to be locked into contracts? If the energy is already being supplied to the property, why do they need contracts? If there was a set up fee instead and customers were free to leave any time they liked, then we might see lowering of prices.

That sounds fine until you look into the cost of switching. The last time this was discussed we learned that the companies offering switching services charged fees that could be as much as £60. Even if you don’t use a switching service, there will be costs involved. These are not passed on to the individual customers but shared by all customers, including those who stay on the highest tariffs.

My present home insurance company shows the price that has been charged for setting up cover on my home and contents, and that seems good practice. It would be good to have more transparency in the energy industry.

The contract you refer to generally applies to “fixed price” contracts. For these to make sense to both parties they need to run for a fixed term. The contract prevents either side from terminating the deal against the others better (financial) interests. But they are a bit of a gamble – who knows more about the likely movement in prices in the future, you or the energy company? So why join them? Because they are artificially cheaper.

These contract prices are generally subsidised, one way or another, by those on standard variable contracts. The only point in fixed term contracts is you know just how much you are paying per unit for the next 12 months. I have said for a long time that they should be scrapped, or certainly not subsidised. I’d see the basic tariff most join as a variable one, no fixed term, but at a lower cost because they would no longer be subsidising artificially cheap deals.

Smart meters will bring one feature that may help – the ability to charge different unit rates – hourly or maybe half hourly – depending upon the wholesale cost of energy at the time. Electricity cost is cheaper when most people are not using it – off peak; at present we have crude white meter type tariffs. In future this choice would not be necessary – the meter would do it for you. But it is a double edged sword: you’d pay higher rates at peak times than now. It would require people to plan their usage better to minimise their costs. I can see a new Convo being launched in a couple of years complaining about how difficult that would be – and how can we expect people to deal with it. Why not have single unit pricing instead! You can’t win.

Although curiously off peak electric is a much lower discount on the standard rate than it used to be and that’s if you can get it.

There are many ignorant and stupid people in this world not just in Britain who do not listen and do not take any notice of any advice You can try to help but with some your help is falling on deaf ears of these people This as well as the cannot be bothered ones People who work with people soon find many ignorant and ones

One of the proposals offered by the CMA is:
Removing the four tariff rule, which the CMA says limits competition and innovation, and therefore allowing suppliers to offer deals designed for certain customer groups.

It is not so long that this rule was introduced for the benefit of customers. I’m all in favour of trying experiments but I cannot see an end to the acknowledged problem that many customers are ‘disengaged’ with the market.

I recall when Which? proposed simple unit pricing, allowing customers to compare prices easily. We buy petrol that way and we buy food that way. Under the present system, those of us who are able to shop around and buy cheap energy push up prices for others because the companies have to maintain their profit margins.

Does anyone else support simple unit pricing?

Consultation by Ofgem with various representative groups has decided the four tariff rule introduced under the RMR had not worked. so they are dropping. it. That does not necessarily mean a return to incomprehensible tariffs; the current consultation is partly designed to avoid that.

I think we inflate problems sometimes. Despite the large variety of potential offers (tariffs x suppliers) I have changed several times over the last few years, easily and effectively. For most people there should be no barriers or time-consuming problems. I’d like to see the regulators’/suppliers’ efforts on helping those who are not able to switch easily get the appropriate deal. I’d appreciate Which? putting forward proposals to deal with this – that is, if they are engaged in the Ofgem consultations.

“Unit pricing” has been discussed many times. It means that the fixed costs incurred by suppliers that are common to all users – account admin, meter reading, connection maintenance, some government levies, help for the vulnerable, for example – are not recovered from low users, but high users will pay far more than they cost. That might be acceptable if low users were all poor, vulnerable consumers – but they are not. They can be professionals, well paid, well insulated house, out all day; they can be second home owners. Their share of the fixed costs would then be subsidised by the higher users, who may be in badly insulated accommodation, elderly and / or sick needing more heating, maybe round the clock, more washing, maybe unable to change from expensive electricity to gas, not qualifying for any helpful state benefits, tenants, for example. in other words, the effects would be indiscriminate and give an unfair outcome.

And, in practice, it is not necessary. When Which? launched this concept it was on the basis that most Brits were so innumerate they could not multiply two numbers together and add a third. That idea has been debunked. Even if it were true, we could either find someone else to help or, more importantly, use a site like Which?Switch that not only does the calculations for you, but does it automatically for all the energy suppliers so you just have to decide the one you’d like to go with.

It will not happen – no sign of that progressing in the Ofgem consultation from any of the “stakeholders”, that include consumers.

Many of us are perfectly capable of changing their tariff or supplier. Some don’t and the reasons have been investigated. Some are incapable because of health or mental issues. The cost of heating their homes has long been one of the greatest consumer concerns among the poor.

Prior to privatisation, it was not necessary to shop around for energy and we would be paying the same as our neighbours. I am certainly not suggesting that we return to privatisation because I recognise the value of competition within the industry. As I have suggested before, the competition could take place elsewhere in the supply chain and allow us to have electricity and gas at the same price as our neighbours.

As I see it, industry should be serving the needs of the citizens of this country and not vice versa. The present system exploits the vulnerable.

As I have said above I believe we should focus our efforts on helping the vulnerable. From what I read, Ofgem have a similar view and it is in their consultation.

Energy will cost different amounts from the various suppliers for a variety of reasons, including from where they source their energy and how far ahead they buy it. We can currently take advantage of the competition this creates. Any attempt to standardise what we pay, irrespective of who we deal with, would lead to unintended consequences. One would be the cheaper suppliers would now receive an inflated price and, in consequence, inflated profits. I doubt any of us would like that.

The kind of interference in commercial companies for ill-thought through reasons is perhaps why Drax will eventually receive subsidies of around £1 billion a year simply to burn high-grade wood pellets in the, apparent, belief this will save CO2 whereas it appears to have the opposite effect – with particulate emissions said to be worse than burning coal. Another “fixed cost” we will end up paying.

You say that we should focus our efforts on helping the vulnerable. Many have said the same but to a large extent it does not happen. Until we wake up to the fact that fair treatment of members of our community is more important than the wishes of the commercial world I see little opportunity of making progress.

As I said earlier this is part of Ofgem’s consultation. “Many of us” can only try to influence outcomes if we have a dedicated and objective organisation (or several) to present our case. This is a list of “stakeholders” acting on behalf of consumers in the current consultation I linked to above:
Individual consumer
Christians Against Poverty
Citizens Advice
Chartered Trading Standards Institute
CMA (response to Confidence Code Consultation also referred to this consultation)
Committee of Advertising Practice
Ombudsman

There are various references in the consultation document to helping the needs of vulnerable customers. Just one says:
“2.102.
Regarding the inclusion of a specific requirement on suppliers to provide extra
support to vulnerable consumers, we refer stakeholders to the policy consultation
running parallel to this statutory consultation. 24.As set out above, this policy
consultation proposes to introduce an additional principle into the SOC that makes
it clear to suppliers that, in order to uphold their obligation to treat all domestic
customers fairly, they will need to make an extra effort to identify and respond to
the needs of customers who are in vulnerable circumstances”..

There seems a number of organisations representing consumers to whom comments could be addressed and who should have consumers’ interests at heart. One that seems to be missing is Which? but maybe they are contributing through another route. I do hope so. I have asked @neena-bhati if Which? would like to explain their role and position.

It won’t work, Malcolm. Let’s have everyone paying the same price for energy and let the government and industry work out how to achieve this efficiently.

Let’s put the needs of people first.

I find it a little strange that we get so worked up about just energy pricing when we all, including the vulnerable, pay substantially more for food, for example. Should we expect calls for all items of food to be the same price so no one needs to shop around?

If you want distorted profits, or yet more taxpayer funding, then that would be one result of an artificial market. We need to sort out the difficulties that affect a minority that need help, not put in some bureaucratic nightmare that avoids one problem but creates many others.

However it is most unlikely to happen and, as far as I know, no consumer group has suggested it. Ofgem, with the relevant groups, is working through the issues of the vulnerable and how best to help; I will be interested to see the results. Meanwhile, where is Which? in suggestions and contributions to the process?

So sell electric and gas in the supermarket then and whe can choose whatever is cheapest this week! Would help prepayment customers especially.

In the past Which? has pointed out that fuel and food costs are major concerns to consumers. Some supermarkets sell of fresh food at highly discounted prices on a daily basis.

If it was as simple as helping the vulnerable as you suggest, why has it not happened already? The problem has been recognised for years and we need action, not talk.

It’s not just me that thinks that our energy industry must change and that’s one of the reasons we keep having these Conversations.

I don’t think Which? needs to tell us what costs money. I’d include in the major costs food, housing, travel if you are working. The vulnerable are all subject to these costs that are greater for most than energy. That was the point.

The main problem is, I suggest, who is best placed to identify those in genuine need. It cannot be the energy companies directly as they will not have independent access to such personal information. They will need to be informed by those who do hold appropriate records. We have a state benefits system that is directed at such people; perhaps that is not working properly? Perhaps local social care is not as effective as it could be?

I have promoted action after talk on a number of occasions. The question is who is best placed to take such action? Maybe Which? could help us here. However, the consultation Ofgem are running is, it seems, addressing this problem. I hope Which? are making a contribution using their consumer knowledge.

According to this site, energy bills remain the greatest concern: https://yougov.co.uk/news/2015/01/14/energy-biggest-household-concern/

I understand your view but in my view the main problem is that those who are unable to switch tariff or supplier can be left paying higher prices. That means that those who secure cheaper deals are being subsidised by those who are paying the higher prices.

I would think people would have cause to be most concerned about their highest expenditure – which start with rent, food, probably travel, council tax all of which are likely to be more expensive – some significantly so – than energy. So the practicalities of this do not seem to align with the apparent emotive response. However, not the point. The point is how people can use their money best and that, as we keep repeating, means selecting the best energy deal themselves, if they are capable, and with assistance if they are not. That is the primary problem we need to tackle.

We’ve covered cheaper deals several times and my view is, to repeat what was said earlier, scrap fixed term fixed price deals that appear to be subsidised by the standard variable tariff deals and thus reduce svt costs – that would then be the default tariff for most people. I’d be more than happy for Which? to push for this. it seems to have abandoned its flawed “petrol pump” price policy – I haven’t seen it mentioned for some time. It needs to put more constructive proposals forward to Ofgem. Does it engage with them? Will we be told?

Energy keeps coming up as a high concern. I remember the ‘Which? Squeezometer’ – around five years ago – said the same. Here is a link to a recent debate: http://www.parliamentlive.tv/Event/Index/4cc4448b-07e7-4e96-b34b-ab4e85682e68

I respect that you have different priorities to mine. Let’s agree to differ.

If energy were such a high concern in practice, then perhaps far more of those who could change, and are quite capable, would change?

Lets focus on helping those who need help. I’d like to see specific ways of dealing with this proposed – not “something must be done” but “whar” and “by whom”. Anyone got ideas that Which? can put forward to those who can make a difference?

As I see it, the present system allows the energy companies to exploit a significant proportion of consumers including vulnerable people. That’s one reason why trust in the sector is so low.

For years we have had people and Which? banging on about switching companies and tariffs, yet the problem remains. In my view we need companies that will serve the needs of our citizens, and I suggest that focusing on the energy industry would be a good start. There is not much that individual citizens can achieve, so I hope that Which? will tackle the problem on our behalf.

According to Which?

“It is essential that any rise in food prices are decided on with caution” – Which? response to food price hikes as a result of Brexit
30 January 2017

Vickie Sheriff, Which? Director of Campaigns and Communications, said: “With food prices topping consumers’ concerns it is essential that any rise in food prices are decided on with caution. Any increases must be honest and transparent, so the impact on the consumer is mitigated as much as possible.”

With the decline in the value of the £ post-brexit and the poor continental weather affecting fruit and veg, it is not surprising food prices will increase to the wholesalers and supermarkets. Are we expecting them to absorb the consequences, or as we voted as individuals to leave the EU should we simply accept the consequences?

Food is energy, so only a little off-topic; sorry. And I do think we should put the cost of energy – averaging £1100 a year – in the context of our overall bills. I would expect food to cost at least two to three times that, rent 4 to 5 times (unless subsidised) and travel up to 5x.

Energy suppliers increase dual fuel prices by 10-20% , but when looking into details of the hike, they increase from 50-60% FIXED STANDIND DAILY CHARGE in some cases. (Example Fixed daily charges for one supplier; 20.5 p daily charge from 2015/6 to 32.9p daily charge 2017/8. This works out an increase from £150 dual fuel to £240 annually for dual fuel supply). ….. Can not understand some Energy suppliers offering slightly (varying) lower Fixed standing daily charge but the compensating with a very high dual fuel unit costs. Either way if your household is a high dual fuel user, you lose out on any dual fuel options offered by the Energy suppliers. Why is it not possible for Energy suppliers to offer simple unit cost charge like petrol pumps…?

A fixed charge is part of the tariff structure that energy companies offer. The companies I have dealt with have not increased prices in the way you say, so it may be worth you looking around more extensively. indeed over the last 3 years I have switched tariffs each year and kept reducing my annual bill by significant amounts.

If you look through the, around 40, energy companies you will find a range of tariffs that benefit low, medium and high users in different ways. If you had so-called petrol pump pricing the “fixed charges” that suppliers incur – admin of accounts, maintenance of connections, government levies, help for the vulnerable and so on – would not be “fixed” to all the consumers . A well-off low user would contribute very little; a poor user, necessarily having to use a lot of energy, would pay a disproportionate amount. The so called “fair” pricing would be just the opposite – “unfair energy pricing”.

I have long supported the simple unit pricing, as we have with petrol prices. At present, low users are subsidised by high users.

Low users include those who struggle to make ends meet and high users include those who have large houses and no shortage of money. I suggest that if high users have a genuine need for help with their energy bills (they may have an old house that is difficult to heat or a member of the family may need extra heat because of health problems) they should apply for benefits. There will be some who are low users because they have a second home but this is a relatively small number and could easily be dealt with.

Many people are ineligible for benefits so they would still be unfairly penalised. I am surprised that a charging regime should be supported that benefits people indiscriminately – subsiding the wealthy as well as the poor, and penalising the poor as well as the wealthy. In my view, proposals need to be targeted to help those in need, not at those who are not. I’d like to see winter fuel payments, for example, only go to those in need, and increased accordingly.

However, there is no need to pursue this “fair” prices policy. For those who believe in it, it already exists . There are suppliers who make no standing charge – they only charge for units used. So switch to one of them. Just don’t force everyone else into the same flawed mould.

The other flaw in “simple” unit pricing is it really does not help many people. They will still have to work out their best deal with a little work. Most people have both electricity and gas. One may be cheaper from one supplier, one from another; you’ll need to know your (likely) annual consumption of each in order to decide which suppliers – it might be one, it might be one for each fuel – give you the best total deal. Offsetting against any discounts for dual fuel where the admin charge will be less. And when you get smart meters that allow charging depending upon time of day, with suppliers maybe having rates that differ from one another at different times, “simple” pricing that will give a clear result will go out of the window. “Simple” will not be simple, and “fair” will stay unfair. A decent price comparison site, such as Which?Switch (or the phone version) will be the best bet to select your cheapest deal – which presumably is what most people, especially the vulnerable, will be looking for.

That’s correct. Most benefits are only paid to the genuinely needy. You are expecting the poorest members of the community to seek benefits and these are likely to include the ones who are unable to switch to better energy deals.

Therefore, as I have said before, we need to help those unable to help themselves get appropriate energy deals. Artificial flawed schemes will not help; “petrol pump” pricing won’t help. Ofgem are consulting on ways to help. Let us hope they produce realistic ways that do not have the unintended consequence of penalising the innocent through half-baked solutions. I am confident they won’t.

I have still not had a reply from Which? as to where they are in contributing to Ofgem’s consultation. As they regularly publish press releases, articles and Convos on energy I do hope their views are being put into the pot.

I suggest that we agree to differ, Malcolm.

We already have, wavechange :-). The arguments we put forward are not to resolve the different views we each hold (although it is possible) but to put before others. Convos are, it seems to me, partly to allow many diverse views to be laid out.

🙂 I agree with that but I thought that your reference to ‘artificially flawed schemes’ and ‘half baked solutions’ a bit unkind and I might have come in for criticism if I had used such terms when referring to your suggestions.

I do wish that we had someone to speak on behalf of those who don’t speak up for themselves any more than they switch tariffs. The sick, people in mental decline, those in energy poverty.

wavechange, please don’t take these comments as personal. I believe the petrol pump pricing scheme to be flawed, and explained why; not your promotion of it. At first sight it might sound attractive until the content of an energy bill is understood (only around 43% actual fuel) , the effect it would have on vulnerable people and that it is not simple in practice.

By “half baked” i was referring to the consultation that Ofgem are undertaking and expressing the hope they come up with genuine and practical solutions that are properly though through.

These are only my personal view.

I’m curious, Malcolm. I’m no maths genius but I can’t see the logic in your argument. If I’m understanding what you’re saying, it’s that paying simply by energy unit would penalise the poorer.

Now, I take your point about a system that benefits people indiscriminately but I wonder if your belief in the current system is not flawed? Again, apologies in advance if I’ve got it wrong but distilling your argument into simple terms (for the likes of me) you seem to be saying if companies were to charge only by unit pricing they would spread the production costs across all users equally. You then seem to imply that the fuel companies would not seek to wring every penny they could out of the poorer users – presumably those who would use less – and might maintain the same pricing structure for all irrespective of how much fuel was being purchased. Is that right?

That seems a little suspect to me. If the cost per unit is the same for all, the bigger users would pay a lot more and thus, in effect, subsidise the poorer users, surely? After all, if the non-product fraction of the unit price is the same for everyone, those using a huge amount will pay a lot more towards those overheads than those using only a little. Admittedly, this is based on the belief that the well-off will have larger houses, heat more rooms and take more baths and showers and generally have a more profligate approach to heat conservation.

The other point is that I honestly can’t see how it can be harder to work our comparative costs for fuel when it’s sold like petrol. In the petrol case, for instance, all users pay exactly the same fraction of the price so the poorer drive less and smaller-engined cars. The rich drive gas-guzzlers, and so subsidise the poorer.

I suspect the energy companies exist purely to make money, and they do so indiscriminately. The electricity companies, for instance, tell us they have to pay for access to the various distribution networks, but the amount they pay is fixed – it’s the same across the country, so there’s something wrong when prices differ so drastically. It might even be suggested these companies are unscrupulous, .

If you appreciate that there are costs in the supply of energy that are fixed – irrespective of usage, then it may be clear. We all require our accounts monitored and prepared, we all require our meters read (well most, currently), we all rely on the connections of our supply being maintained, and the government imposes levies on suppliers that we end up paying, mostly irrespective of our usage. So, whatever its size, there is a fixed cost to be recovered. i have elsewhere said that the basis of this cost should be transparent and agreed with Ofgem.

If this fixed cost is then not charged as a separate item, but added to the unit charges, the unit charge will be higher. Those who use little energy, therefore fewer units, will pay a small proportion of the fixed charge. Those who use a lot of energy will pay more than the fixed charge should be. Low users are not necessarily poor and high users not necessarily rich, so the contribution is indiscriminate. I am aware of families with medical equipment, badly insulated house, ill, need lots more heating and washing, in all day, who would suffer by carrying a bigger share of costs that should be fixed, without qualifying for benefits to help. These people who already pay more for their energy should not be further penalised for paying extra towards fixed costs.

Another consequence would be that fixed costs incurred by companies would be under-recovered in warm years – reduced consumption – but in very cold years would be excessively recovered.

I’d like standing charges used simply to recover agreed costs. I believe they will not then be very high. Which? could usefully campaign for this.

I am disappointed that the LPG companies are not included in any of the energy price discussions. We lose out on getting deals for electricity and gas. The LPG companies are very comfortable in making customers sign up for 2 year deals without any escape clauses. It takes a lot of time and energy to get them to give a decent deal and respond to complaints as they say they have to buy their LPG so far in advance but is this really any different from other forms of energy. Their prices often go up but I have not known them be reduced even when the oil prices dropped. I was paying 42pence a litre but new customers were paying 28, not very fair when this went on for a prolonged period. Perhaps Which could investigate?

FMW. I agree. Some people only focus criticim on the main energy companies. At least with that sector most people have an extensive number of suppliers to whom they could switch, with a wide range of deals on offer. We should also look at LPG and, of course, those who rely on oil for heating. Why are they seemingly forgotten in these discussions? My guess would be a large number of vulnerable people rely on off-grid heating and need our attention perhaps more than those on-grid? We have discussed district heating elsewhere but no outcome as far as I know. Progress is what such discussions need to achieve if they are to have more than just educational and entertainment value.

You need to update your response list to include coop energy as you show their response to your communication. I have always found this company to be very competitive and fully inform their customers about their current lowest tariff available.

This comment was removed at the request of the user

Amanda says:
4 February 2017

Try living in an off-gas area with a house full of storage heaters and two meters, and an arcane tariff called Total Heating Total Control (this is not an economy 7 tariff, or a night/ day rate tariff). Only two companies offer dual meter tariffs like this one, Hydro and one other. To change the tariff to a cheaper one involves changing to one meter. All the talk of choice is wasted air. People are complaining about their boiler reliability: chance of having gas would be a fine thing!

Can you not then change one meter if the other deals on offer are beneficial? For example when I had an economy 7 meter, and the company I wanted to switch to did not support dual readings, they fitted a single dial meter free of charge.

Ofgen today have announced the implementation of the CMA’s cap on pre-payment meters.
https://www.ofgem.gov.uk/publications-and-updates/ofgem-sets-prepayment-price-cap-protect-over-four-million-households-least-able-benefit-competition

Gosh – seems a long link. However, a good step forward.
What I would now like to see is the fixed term fixed price tariffs that are subsidised by those on standard variable tariffs removed, and svts reduced in price accordingly.

The question being asked is what Ofgem and energy companies can do to get people to switch to cheaper tariffs. Well, I don’t expect one commercial energy company to recommend their customers move to another. but what Ofgem could do is to publicise comprehensive switching sites and encourage people to use them. Which? could advertise its own switching service on tv. We should also be looking at ways to help those unable to help themselves, and without family to assist. Since energy companies will not have the personal sensitive information needed, this starts with a state authority most probably.

Hello everyone, we’ve now sifted through the plans that were submitted to us by the energy suppliers. Of the 19 responses that we had, 14 of them outlined plans to get customers engaged, trial new ways of billing as well as details on promoting switching. You can have a read of the plans here: https://campaigns.which.co.uk/fair-energy-prices/#energy-suppliers-scorecard

We’ve submitted the plans to the government and Ofgem for review and have called on them to report on progress in the market by the end of April. We’ll also be pressing those suppliers who provided plans to now deliver on them, and regularly set out what difference this is making to their customers.

Thanks for the update, Lauren. It’s better than having yet another Convo about the problems with energy pricing.

From the Ovo response: “At OVO, we’ve consistently campaigned against suppliers who offer deeply discounted tariffs exclusively to new customers – often at, or below, cost.
These are usually subsidised by existing legacy customers or customers whose fixed term tariffs have long expired and are now on “default” – and therefore pricier – standard variable tariffs (SVTs)”

This is an example of companies deliberately pushing customers into paying significantly higher prices if they do not take action. It is increasingly common for insurance companies to push up prices for existing customers. Often they will offer substantial reductions to customers who call to say they intend to leave. Breakdown cover renewal often costs less for new customers.

I would like to see Which? push for FAIR PRICES FOR ALL and fight the exploitation of the public. Which? is supporting the switching game but I believe that this is the wrong approach.

We have had a number of suggestions throughout these Convos as to how we might improve the energy business; often contrasting ans not always in agreement. Why do Which? not summarise these in the round (not simply picking those that support their campaign) and provide an expert commentary on the pros and cons?

wavechange, as I have repeatedly (at least 26 times) said, joins me in the standard variable tariff vs. fixed price fixed term tariff debate. Many of the latter are subsidised by svts. I would abandon fixed price tariffs, unless they are unsubsidised, and the result should be a reduction in svts. This would then avoid the argument about a price gap and the need to regularly switch. Except between svts from different providers of course.

Which? You have never commented on this.

My present dual supplier – Co-operative Energy – dose not appear amongst thoise firms who have responed and thse that haven’t

David Cooperative Energy are in the non resp[onders list.

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Having been overcharged £2000 by Scottish power( Their estimate ) I am still waiting for a refund. They tell me I will have to wait a full year to see that they have not made mistake.