Energy switching – spending time to save money

I have signed up to receive information about one of the ‘Ready to Switch’ collective switching schemes and will receive information about their offer soon.

Can anyone tell me if these schemes are worthwhile?

Hi Wavechange.

I have noticed that a number of councils are looking into collective purchase schemes for local residents where they are hoping to use their bulk buying advantages to negotiate better tariffs for residents. I don’t know whether this is the same thing as the ‘Ready to Switch’ schemes you mention, but on the face of it it looks attractive. The devil is no doubt already worming his way into the T’s & C’s but it is potentially a good proposition.

Taking a broader view, switching is, as Chris of Gloucester remarks, only rearranging the furniture and doesn’t change the basic economics of supply, demand, production and supply costs, and taxation. Obviously there are economies of scale to be had on the supply side which the big providers should be capable of delivering to domestic consumers, but the margins appear to be tiny. Logic tells me that it is inconceivable that a company buying a small quanity of gas or electricity from the producers and feeding it through a common grid to a small number of dispersed customers can, over time, do it cheaper than the majors . . but that is how it appears to be.

To respond to Burton’s comments above, I switched to The Co-operative Energy last year and, as I reported in another Conversation, was very satisfied with their prices and their responsible business model and policy. I also valued the Co-op’s ethical stance, and the fact that it was a mutual organisation was also important. So I was not exclusively concerned with a raw tariff comparison, and – because I have not done an analysis and like-for-like comparison – I did not know whether I was slightly better off or worse off as a result; that doesn’t matter in the short term, but I should be worried if their general objective, to be at least competitive with the majors on price over time and better on service [I paraphrase], was not being realised.

However, all good things must come to an end and we recently moved to a brand new house which was already signed up to E.ON. The logistics of dealing with a switch during the moving process have taken second or third place to sorting out various other more pressing matters [like getting a telephone line and broadband]. Following previous bad experience with E.ON I had vowed never to trouble them again for so much as a watt or a therm. But I have to say I have been impressed with their written communications [once the Royal Mail found our address and we started getting occasional deliveries of post] and with their personal customer service over the telephone [the mobile has its uses at last!]. Their dual-fuel monthly direct debit tariff [with monthly customer meter readings] has very low exit charges [£5 per fuel] and seems to be about as good as you can get at the moment, plus they are estimating a lower annual cost than I was expecting. The first month’s consumption will be untypical [I hope] because of the prolonged low temperatures. A number of factors will make it impossible to make a real comparison – the greater volume of the house, a new more efficient heating system, much more sophisticated zone/time and temperature controls, and higher insulation values; nevertheless we are hoping that costs will be broadly similar and possibly lower overall. I feel like switching back to the Co-op as soon as the time is right because I prefer the mutuality aspect and still have faith in their more responsible approach to sourcing and pricing.

The difficulty in switching supplier seems to be that all switching sites require you to state your current bill or energy use. This can have no resemblance to future seasons, especially in Britain, where no two years are the same, regarding temeratures, etc.
This problem is caused by the fact that some tariffs include a standing charge,whilst others don’t.
Would it not be better to introduce a minimum annual charge ( which most consumers would exceed) to cover the expense of providing the supply, metering, etc.?
Then, the average consumer would be able to compare unit prices, without needing a degree in meteorology or climate change !