Energy providers – we just don’t trust you anymore

You’ve spoken out about your gas and electricity suppliers and it’s clear you’re unhappy. So how have gas and electricity suppliers come to incite such bad feelings, and why do we trust them less than we trust banks?

The average gas and electricity bill could defy the best cryptographer. We dutifully pay our bills, but few of us have any idea where the money’s actually going – and it’s far from easy to find out.

Ofgem says that the average dual fuel bill for this year is £1,150. Less than half of that (£495) pays for the wholesale cost of the energy you use – so where does the rest go?

Transparency from suppliers

The extra costs cover anything from the supplier’s profit (which has soared yet again for Big Six suppliers) to customer service staff wages – but none of this is easy to work out from your bill. Here’s a breakdown of where your money goes (click to enlarge):

Graphic illustration of where your money goes

On top of that, the government has introduced a whole raft of mysterious acronyms – social and environmental schemes from CERT to EEC to CESP to ROCs – some of which you’re paying for.

We’re less than impressed

In our recent satisfaction survey only 12% said they think energy companies are open and honest about costs buried in bills, and nearly nine in 10 bill payers would like details of charges beyond energy consumption.

So are there any alternatives out there? Ebico – which came third in our satisfaction survey – charges all its customers the same rate, even if you’re on a pre-pay meter (where households who are typically worse off are usually charged more).

One of the winners in our survey, Ovo Energy, was established as an alternative to the big suppliers and provides a breakdown of its costs on its website. It also pays 3% on all credit balances – it looks like I’d be better off banking with them at that rate of interest.

With newcomers like this, is the tide finally turning on the ‘Big Six’ suppliers that dominate the market? Do you trust your energy company – or have you considered turning your back on them to see what the others have to offer?

Which? Members can join our team of energy experts on 27 January from 12.30pm for a special live energy Q&A session. They’ll be answering your energy questions – from getting yourself on a better tariff to troubleshooting problems with your supplier.

Comments

The Scottish Play says:

24 January 2011

After reading a recent Which? article about the energy sector I decided to have a look and compare the deal I was on with what else was available in the market. I am currently with Eon, so dug out my latest bill and then went to whichswitch and tried to make a comparison.

My bill didn’t mention what plan I am on. So I went online and to set up an online account so I could check. The process was reasonably straightforward and I felt it was a good idea to be online, hence killing two birds with one stone.

However once I got everything set up it was telling me that I was on an EnergyPlan. Try as I might I could find no mention of Eons EnergyPlan on any of the switch websites. I therefore went onto Eons website and searched their current deals and then back through lists of old energy deals.
Nothing close to EnergyPlan.

Eventually I called them and held (as you always have to). I was told that I was on a Standard plan, which they also sometimes called an EnergyPlan. I asked why it had two names but sadly that was inexplicable to them as well.

From the number of deals they currently have available (which is mind boggling) it seems odd that they would choose to name their simplest one twice.

I have to say I agree with Which? – it seems that their plans are there to confuse us and as a result it’s no wonder that people have lost their trust in them.

dave Darwent says:

I think that amongst all my friends and acquaintances the majority opinion is that the government keep telling us that wholesale energy prices have fallen, yet the bills only ever keep going up, therefore the energy companies are ripping us off.

I don’t know very many people who are really interested in how much profit the energy companies make nor who really want to know the breakdown of their expenses: they simply want to see their bills at least track the wholesale market, down as well as up, and in any event be a darned site lower than they are now.

Speaking personally the issues that make me distrust the energy companies include:
1) offering different prices depending on how you pay (Direct debit, On LIne, Cheque, pre-payment)
2) offering differing prices depending on when you pay (e.g. monthly, quarterly, in advance, in credit)
3) insistance on setting payment levels so that you get onto credit, and not just by a few pennies
4) reluctance (or downright refusal) to refund over-payments
5) as mentioned very clearly by many other Which? conversationalists, OfGEM and Which?, the deliberately misleading (OK, my word, others say confusing) bills.

There are other reasons I distrust them, but they are insignificant compared to the 5 above.

Jem says:

3 February 2011

I have been with a supplier for 14 months now. In that time they havent sent me an electricty bill and havent sent me a gas bill since June 2010. I have phoned and reminded them and they have even sent meter readers around. The rate isnt one of the best but given the twelve month rule I am tempted to stick with them as they can only charge me for the last 12 months, so so far I have two months of free electricity.

Any thoughts

Mark says:

2 March 2011

It’s not surprising we don’t trust them. Every time wholesale prices go up our bills go up, but when wholesale prices drop our bills don’t. Then there’s their incredibly complex tariff structure which different prices for everything and discounts and surcharges on top, which makes it very difficult to compare prices (and I don’t want to rely on price comparison web sites, which I have never found to be accurate). My last supplier kept sneaking in changes to the T&Cs to their advantage too.

digitalgenius says:

8 March 2011

The problem appears to be lack of transparency with all energy suppliers. They don’t inform you after a year that your tarriff has changed, like the way the financial industry doesn’t inform the saver when a bonus saving rate of interest ends. Energy suppliers use the same tactics and rely on their customers complacency

Whitwams says:

28 November 2011

The introduction of smart meters by energe suppliers will enable them to apply prohibitive prices when they have failed to provide the generating, and and distribution capacity. It heralds a marketing utopia where demand can be adjusted to suit supply. Why should they bother to forecast, plan and invest when demand can be throttled. And all of this will be agreeable to a government besotted by the absurd fiction of renewable energy from the winds and tides which are available for only 30% of the time.