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It’s make or break time for energy suppliers

Energy prices up

The results are in. The outcome of the long-awaited energy market assessment was released today and it’s good news for the 45,000 of you who backed our Fix the Big Six campaign. But we haven’t won yet…

Ofgem has decided that the energy market should be referred to a full scale competition inquiry.

The assessment found that retail profits increased sharply between 2009 and 2012 with little evidence of increasing efficiency from the suppliers.

It also expressed concern that the structure of the market means that it doesn’t work for the good of its customers.

We hope that this provides an opportunity to quickly address and resolve the underlying problems of a fundamentally broken energy market. We know that energy prices are consistently at the top of consumer concerns, and we know that levels of trust in the energy industry are at disastrously low levels – just one in five of you think your energy provider will act in your best interests.

A competitive energy market?

The inquiry has to take a long hard look at a structure that allows big energy companies to keep a stranglehold on vast swathes of the market.

The practice of buying and selling energy to themselves should be brought to an end and this can only be done by separating the supply and generation parts of their businesses, just as SSE committed to doing yesterday. This would add a level of transparency to the market and would provide a much greater degree of confidence that we’re being charged a fair price for the energy we use. Plus, SSE’s action proves that suppliers don’t have to wait to be forced to act – they can do so on their own right now.

Rebuilding trust in the energy market

The process of rebuilding trust in a market that has taken all of us for granted will take time, but this is a crucial first step. It’s good news that the regulators have listened to the tens of thousands of people who have supported our Fix the Big Six campaign. We now need the investigation to work quickly to expose what’s really happening in the energy market and confirm where competition is lacking.

We’ll be working hard to ensure your voice is being heard throughout the investigation, and we’ll continue to argue for radical reforms to ensure that the market works competitively for everyone – especially for the millions struggling with spiralling bills.

What do you think about today’s announcement? Is this the start of a journey towards an energy market that works in your best interest?


Heard it all before and nothings changed. This ofgem review has taken what 5-6 months, and for some is about 5 years too late. ( http://blog.moneysavingexpert.com/2014/03/27/the-governments-energy-changes-mean-fewer-people-will-switch/ ) So how long will we have to wait for a full scale competition enquiry to report back ? Probably much longer.

And if SSE’s idea of efficiency is making 500 people redundant I guessing many of the big 6 will assume the tactic. Yet I doubt a single “expensive” board member will be include in those redundancies.

So yes the news of this review is welcome I for one, will not be expecting much from it.

I’m also concerned that although energy have now been banned from offering cash cashback, they can still issue vouchers. And as we all know its us the consumer that ends up paying for these incentives through higher bills.

So Ofgem have now passed the buck onto the CMA for further investigation and we have to wait possibly another 18 months for their findings plus more time for Govt changes in legislation if deemed necessary. For legal reasons tacit collusion has been interpreted as tacit co-ordination to soften the impact of what we knew all along that the energy market has been exploiting it’s consumers for years.

I fail to see how Labours price freeze would benefit everyone as quite a number of people like myself have changed to a fixed tariff. If wholesale prices in a fluctuating variable market have not been passed on to consumers then maybe we should be eligible to claim compensation for this gross unfairness by the Big 6.

It will be a long time before I will build any confidence or trust in these companies again. Thank goodness for the persistence and determination demonstration by individuals who believe in justice and fairness for all in bringing this controversial issue into the public domain.

They just said on the news that the review could take anything from 18 – 24 months 🙁

I’ll believe it when I see it happen. It’s going to take 2 years to have the review and if this government is still in power there will be some excuse as to why nothing can be done for the next 10 years or so. Too many supporters of this government are in power in these companies and want to see their dividends and profits increase to line their own pockets.

Kay Forsyth says:
27 March 2014

This is all well and good if it happens but why does no-one mention ‘standing charges’ which,in my case (and probably in the case of quite a lot of OAPs who are watching their pennies), are almost as much as the fuel charges.

As many people cut down their usage, energy companies will presumably use standing charges as a way to up their profits, you know it, I know it, but the regulators, well say no more.

I can understand the reason for a standing charge but it needs to be the same across all suppliers for a given area. The standing charge should be set by the regulator to represent the true cost to the energy companies.

JGS says:
27 March 2014

Standing charges are another way of making sure you pay the maximum. There is no way anyone can avoid them at present. They are independent of your energy usage.
All costs should be tied to usage. We need one simple tariff with no tiers and no standing charge.

Dave says:
27 March 2014

There are Utility Companies out there that don’t have any Standing Charges. I know that because we are with such a Company but I had to shop around to find one.

As I work abroad for much of the year my electricity bill with EDF was a modest £100 per year of which around £51 was in respect of standing charges.
Like you I switched to a supplier who offered a tarif without standing charges and cut my bill in half.

STANDING CHARGES SHOULD BE BANNED . . . . No-one has ever explained TRUTHFULLY what they really are and why they are charged. The supply cables/pipelines to properties were originally installed by British Electricity and Gas Boards. Now they have been Privatised at the behest of the Conservative Governments they are mostly foreign owned. So added to the massive sums poured into ‘so called’ poorer countries and the massive amounts paid through all sorts of channels to Immigrunts we are all a Big Bunch of Fools paying through the nose for everything.
We are even conned to believing that the EU is good for us so we buy the majority of our goods from China.
I am definitely voting for UKIP anytime everytime.

What is the reason for standing charges? I don’t pay BP 26p a day to maintain a filling station here in Stonehaven. I just drive in and pay the going rate per litre. They know the volume of fuel they sell p.a., and build their fixed cost and overhead into the unit price. I can see no difference between this and an energy supplier selling energy by the kWh.

Dave – who are you with for a tariff without a standing charge? I was looking for such a supplier earlier this week but could not find one.

Dave says:
27 March 2014

We are with Ebico. Simple one rate price.

Or you could try GreenEnergyUK they have no standing charge either but only do electricity

Dave many thanks for the info on Ebico – I have started the switching process.

Gerald Mc Menemy says:
27 March 2014

I saw the story break on Sky News this morning. I was thrilled and delighted. I am really pleased that Which and through Which we the public carry so much clout. I think this is a beginning. I have a voice through Which and whether it be government or big institutions we can go on from here and raise other important issues in the future.
Gerald Mc Menemy.

SSE are probably trying to get in first before any underhand practises have been discovered on their part.
I hope that WHICH will keep up the pressure. 2 years is a ridiculous amount of time to wait, yet another example of Ofgem having no teeth and not taking `charge`.

keith atkinson says:
27 March 2014

I switched to the Coop from BG.
I PAY £72 per month for a four bed detatched and have saved hundreds.
What more is there to say?
They are rip;ping you off,Time to switch too.

The Don says:
27 March 2014

That’s way less than I pay for a 4 bedroomed semi, currently on scottish power fixed deal til march 2015, paying £125 pm for dual fuel. What did u used to pay for comparison and who with?

Over past few years, I’ve been with BG (good CS but no doubt not the cheapest), First Utility (dire service, incorrect bills, lousy CS) and now back to Scottish Power. So far, CS fine, but would like to pay less:)

Keith Fletcher says:
27 March 2014

Re-nationalise. There should be NO profit grabs from key public utilities. The big bosses have made millions whilst the rest of us have had continually rising bills. Disgraceful.

old john says:
27 March 2014

as most of the energy companies are foriegn owned their main interest is profit. They are not concerned with the consumer or really what OFGEM says. They hjave the ability to stone wall and make minor concessions.
Energy & water supplies are too imprtant to be placed in foreign ownership. They should be owned and run by the state as they were previously.

I doubt if,that at the end of all the promised investigations, there will be any major change in what we pay.

I agree completely, I am not a socialist or a Labour supporter but I think that all utilities should be owned by the state and not privately owned. it should not prove impossible to run them all efficiently for the good of the country.

Marjorie says:
27 March 2014

“Once upon a time”…………..electricity was The Electricity Board. gas was The Gas Board. Water was also state owned. We didn’t know how well off we were; now we know just how badly off we are. It’s all profit for the shareholders, most of whom are from France or Germany and elsewhere.

This needs to change.

“Once upon a time”…………..we had power cuts (in the 70s)

Just look at the mess the NHS is in, that’s state owned.

Sadly the State is not the best group of people to manage/run these things. But then again neither are the current crop of greedy CEOs. Hopefully there’s a happy medium somewhere in the middle, but I doubt it. I would suggest the regulators run them but we all know how hopeless they’ve been.

Where does that leave those ofnus who on Which advice through the cmpaign, went with First Utility? We had never heard of them before that, find them very good to deal with, but still never hear them mentioned amongst the ‘Big Six’.

Michael JW says:
27 March 2014

Once again WHICH-The Consumers Association speaks for us all Members and Non-Members alike.
The Goverment would do well to co-opt a Which Member to join the Panel of MP’s when they “grill”
the executives of the big 6…H.O.C. Select Committees……Armed with all the valuable information from Members they would then be able to ask and demand the right answers the right questions.

Jeremy Taylor says:
27 March 2014

My energy bills are now lower than they were 3 years ago with nPower. I have been with OVO Energy and had a 5% reduction last month.

Forget standing charge, its an internal admin figure that is only displayed in order to confuse. unit price only

Ecd says:
27 March 2014

I switched from one of the big six last July to Flow. It was cheaper and fixed until Sept. this year. Everything that’s been said applies only to the big six. I’ve seen no reductions from the reduced Green taxes. Will this new move make any difference?

This is all very laudable but I have a nagging fear that not a lot is going to happen. Very few, if any, of the politician/officials involved will be willing to jeopardise the prospect of the non-exec directors job that they will be will be looking for when either thrown out, found out or voted out.
I get the feeling of ” same as, same as” and we’ll keep paying through the nose. A serious threat of re-nationalisation without compensation might gee them up but there isn’t a political party in this country with the will or the courage to even consider it.

This is indeed good news, but 18 to 24 months is a very long time to take to investigate this industry which for a long time has had a licence print money as required and hit the consumer in the pocket. Let us keep up the pressure on ofgem.

Jeremy Taylor says:
27 March 2014

I would never invest in energy companies. Their profit margins are 5% or less. I invest in shares that give better margins.

Dorene McCormack says:
27 March 2014

This is what Ed Milliband was calling for. The Tories ridiculed the idea. Why now has SSE decided to freeze its prices? Is it to cover up the fact that despite making huge pofits they are making 500 workers redundant? Is it because many customers are moving away from the Big 6 to smaller suppliers? Has the government only now brought in Ofgem to review the energy market as it may be popular with voters?

And its still a silly idea, SSE may have frozen their tariffs but for a large number of people that tariff is not the best value by a long way.

If the issues in the Ukraine escalate and Russia does stop the gas flowing , gas prices WILL rise.

All a company does when it offers a fixed tariff is decide on what if thinks energy prices will be in the future and then charge accordingly. So if they fix for several years all you’re doing is paying the future higher price now.

That said, same fixed deals depending on your usage can work out cheaper or as cheap as another companies normal tariffs, so they can be good. For my usage SSE is one of the more expensive. EDF who generate a large amount of their own electricity are fairly shielded from market fluctuation, so for me they offer the best prices. So yes do shop around.

Graham Long says:
27 March 2014

Whole heartedly agree with Kay Forsyth comments.
I am with Utility Warehouse. Their Standing Charge increases were quite something. See below.
Was: £17.64 per Annum Including VAT.
Is now: £67.52 per Annum Including VAT.
Was: £31.50 per Annum Including VAT.
Is Now: £68.91 per Annum Including VAT.
Their unit rates for Basic Gas and Electricity (Excluding Phone and Broadband, which they offer as a bolt on package), are similar to those of the big 6, although they will have you believe they are the cheapest.

Roy E Jackson says:
27 March 2014

Is it not typical that one of the big six is now trying frighten everybody by threatening to cut off energy supplies, as they have not updated their energy production systems