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Energy suppliers must take action to help customers

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As the nights draw in colder and darker, millions of UK households will be turning up their heating and switching on their lights. And millions will be paying unfair energy bills for it. So what needs to be done about this?

There’s a big problem with energy companies. We have had a two-year long Competition and Markets Authority (CMA) inquiry into the energy market. Finally it was revealed that customers on expensive tariffs collectively overpaid by £1.4bn for the energy they used.

Those people account for over half of all energy customers. They aren’t heating empty mansions for the fun of it; they’re simply paying way over the odds for the energy they use. They’re completely disengaged with the energy market, and paying top prices for an unfit standard variable tariff (SVT).

Unfair energy bills

Around 16 million people – over 58% of the ‘Big Six’s’ energy customers are on these SVTs deals – among the most expensive on offer. The problem is that many people on SVTs aren’t being prompted to look at better deals.

Attempts have been made to engage with energy customers in the past. These include initiatives such as printing the cheapest tariff information on bills and introducing customer charters to help more customers with billing and service. However, without proper trialing and testing these methods haven’t addressed the problem. The biggest energy companies continue to have too many customers stuck on the most expensive deals.

Recent Which? research found that the gap between a SVT price paid with the Big Six is, on average, £111 more than their cheapest tariffs.

Some of you will know the game all too well – unless you keep a beady eye on your meter readings and your tariff deadlines, when your energy company whacks up your tariff price it can be easy to end up paying more that you should on your bills.

Keeping bills down

So we’re demanding to know how energy companies will step up and take action for their customers this winter,  and show that they are taking the market inquiry findings seriously and are committed to doing the right thing by their many customers.

Our Fair Energy Prices campaign is challenging energy companies to publish their plans to right this wrong by 31 January 2017, as well as take immediate action to help their customers this winter.


If you’re worried about keeping your bills down this winter, take a look at our top tips to help you get the most out of your heating and avoid being overcharged by your energy provider.

So, do you think energy suppliers should be doing more to help their customers off unfair energy bills? Can our challenge stir them into long-awaited action?

Comments

Many people can manage to look after things without much help but others cannot manage at all they need be helped in everything they do Many do not heed any advice at all I find articles giving advice on most things I am already doing the things that they are advising you to do but take heed of all advice remember and learn

I’d guess that the latter category are the majority. You can lead a horse to water, but you can’t make it drink.

Systems are geared for the competent and savvy: If they find it difficult or confusing what about
those who are vulnerable through age, mental or health issues or are digitally illiterate. They have no chance in this era.

Fixed price fixed term tariffs are generally subsidised by those on the more expensive variable tariffs. If everyone moved to fixed term tariffs revenue would fall, and profits also. So to put his right energy companies would increase the fixed term prices. In other words this £1.6 billion “saving” is a fallacy created by a distorted market.

One answer is to get rid of the cross subsidy. Abolish the fixed price fixed term tariffs and make a variable standard tariff the norm. This would allow their cost to be reduced . Other tariffs – with and without standing charge, time-based tariffs two tier tariffs for example – could allow people to choose the most appropriate one for their needs.

Those unable to choose the best tariff for themselves, or not confident or capable of making a change, should be helped. Their own energy company could be forced to ensure the customer was on their best tariff. Why do we have to gamble on that choice? At the end of each year your supplier could look at your consumption and give a rebate if another of their tariffs would have given you a lower bill. That still leaves you to choose your energy company and I don’t see a way around that.

At the moment a number of small, newer energy companies are offering cheapish fixed price tariffs, compared to the “Big 6”. Iresa at £725 for a medium user is £89 a year less than Scottish power for example. So for those who are capable, and trust a new company (although Ofgem have now put in place regulations to protect consumers money – overpayments for example) this is a good time to take advantage. However the larger better financed companies buy energy some way forward to help stabilise prices. The newer companies rarely have the resources to do this. Energy costs are likely to rise, not least because of the drop in value of the £. So it is likely that the new cheaper companies will either fail, or have to put up their prices much more substantially then the larger ones.

I read this evening on the BBC News website that one of the smaller energy suppliers, G B Energy Supply, had gone out of business.

In a letter to customers on the company website, the managing director said: “Due to swift and significant increases in energy prices over recent months and, as a small supplier our inability to forward buy energy to allow us to access the best possible wholesale prices, means that the position of the business has become untenable.

Ofgem has said it would appoint a new supplier and stressed that outstanding credit balances were protected. No exit fees would be charged as a result of the closure, but Ofgem said it would be for customers to tell their new supplier that they wanted to be put on the cheapest deal.

Malcolm has been predicting this kind of development for some time as wholesale energy prices harden since the smaller suppliers do not have the resources to buy energy in the forward market and do not have any generating or production capacity of their own. G B Energy supply will probably not be the last small energy company to go under.

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The meter in the Convo introduction is an early example of a smart meter. You had to be smart to be able to read it.

I believe that they have been phased out for gas meters but some of the old-style electricity meters may still be in use.

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Indeed. I have little doubt that many lack practical skills these days. It was the adjacent dials rotating in opposite directions and the need to round numbers down rather than up that must have been responsible errors in reading. If I was a designer I would have put the instructions on the meter.

Yes, it’s not usually mentioned that smart meters include a supply disconnection relay. In the case of a “power shortage”, or peak demand period, the power supplier will be able to “load-shed”, and guess which consumers will be cut off….the ones who’ve installed smart meters, of course.
With the rise in “renewable” energy generation and the steady closing of traditional base-load power stations, we are slowly walking into a nightmare of regular power cuts and these smart meters are the way of introducing this policy.

There is a real use for this disconnection relay. in the event of a power shortage problem in an area it allows selective load shedding. Vulnerable people who are dependent upon an electricity supply, for example for medical equipment, can be protected and kept on supply if the type of situation permits.

Just had a NEW Gas Meter & Electricity Meter fitted by SSE and a SMART METER(, tiny like a Mobile Phone on a tiny Stand.) I don’t have to ever again have a Meter reading or any Reading’s… No callers to read my Meters or Estimated Billings. And my SMART METER shows me Exactly how much Gas & Electricity I use, each day, just by pressing a KEY, so simple to use. PLUS I got a Fantastic OFFER From SSE for my Telephone & Broadband, beating what WAS MY “BT” by £12.80 per month. Also I have included in this SSE 18 Month Contract.FREE Phone calls to 20 Different Countries,for up to 70 mins per Call. After the 18 Month period is UP, SSE guarantee a fixed charge of £30 per Month. BEAT THAT? Robbery from BT £34.80 per Month,just Phone calls Free on a Weekend to UK Landlines. Bye Bye “BT” I’m a very HAPPY BUNNY.with SSE. thanks, they may not be the Cheapest Gas & Electricity Providers, but take notice of the Difference in my Phone & Broadband with “BT”, So happy to be FREE FROM “BT” Welcome “SSE”

The fact that over half of customers are paying more than they need to after all the publicity about switching tariff or supplier reinforces my view that the efforts so far have largely failed. Not only that but when a customer switches supplier the charges are shared by everyone, whether they switch or not.

We need a different approach, particularly to help those who are struggling to afford to heat their homes. My suggestion is that we make use of the undoubted value of competition elsewhere in the market and sell energy to everyone at the same price. That might not be popular with those who make a point of making sure that they are buying energy at the cheapest price, whose bills would no longer be subsidised by those who are paying more than the need to, for whatever reason.

When you are large enough to be able to engage in price fixing with 5 other equally large other companies and getting away with it until more competition enters the market and you are also under investigation by the regulator, then other strategies need to be thought up and introduced to compensate. I personally don’t have enough faith in such companies who are able to buy in advance when wholesale prices are cheaper to believe these prices will be passed down to their customers and not to their shareholders.

‘Tease and Squeeze’ is the latest game plan to hoodwink those customers who fail to review their Fixed Rate deals at the end of term and who are automatically switched to Standard Variable Rate, adding as much as 30% to their annual bill. The question is, do consumers really need to live in a state of wheeling and dealing and constant game playing in order to keep warm during six whole months of the year, and do they welcome the added confusion of ploughing through variable and assorted tariffs before deciding which one they can afford?

What is required is a simplified energy system that is straightforward and easy for everyone to understand so that the people who probably need it most, such as the elderly and the infirm are not deprived of their basic right to keep warm during the winter months and moreover, don’t have to suffer the added burden of worrying about it.

I welcome the much needed extension to editing time, thanks Patrick 🙂

i am with Scottish power and find them very good they have just reduced me from £60 pounds a week for gas and electric to £50 also if i am in credit by the end of the year they put it into my bank account can,t get better than that

I am guessing you meant £60 a month (not a week) reducing to £50. £50 a month is very reasonable, £50 a week is not!

I have just switched at the end of a three year fixed tariff with Scottish Power to another cheaper supplier. However I must say that I always found the service from Scottish Power very good although I was nearly always in credit with them without the automatic repayment option you had.

50 pounds per week? what size of house are you heating. I have a 3 bedroomed house and only pay 111 per month for gas and electric together

Maggie says:
3 November 2016

I found Scottish Power absolutely dreadful for customer service. Twenty five minutes the phone waiting for customer services only to be told to call back later. i swapped to EDF who are even worse ! I give up.

Try SSE, they may NOT be the Cheapest, but are simply Great for, Gas,Electricity and PHONE & BROADBAND Deals, saved me £££££s, from my Old Provider “BT”. Bye Bye “BT” Hello “SSE”

Energy companies have different costs, will buy energy differently and in different mixes so attempting the all charge the same per unit will distort the market. Smaller newer companies will drop by the wayside when energy wholesale costs rise as they will not be competitive. And who decides the unit price? We could apply the same logic to food, water, transport (equal £/mile), housing (same price per sq. m).

However, I think it is not a reform the energy regulator is considering. We do, though, I suggest need to remove the existing distortions caused by artificially low fixed price contracts, the inequitable way some prepayment customers are charged, for example. How you force savvy people to shop around for the best deal when they cannot be bothered beats me.

What Which? could do is to present the facts a little more accurately. Unless I have it wrong ( 🙁 ) this continual presentation of £1.6 billion being spent unnecessarily seems a bit like the £350 million a week we’d save leaving the EU. Creating a false impression. Customers on variable tariffs subsidise those on fixed price ones. Remove that subsidy and the prices will come much closer together and the savings will be overall very much less. ideally, scrap the fixed price tariffs; in reality, if they are correctly priced, the customer will not benefit significantly

Malcolm – I don’t care about markets, just about people who cannot afford to heat their homes. In my view, we should put the needs of people first.

The world exists with “markets” for almost everything we need, whether food, fuel, housing, travel or whatever. Distorting a market (who is going to decide how to do it) is generally counterproductive. We have seen this in the past with government subsidies.
Many of us “care about the needs of people” and I have above made some proposals that I believe would make the energy system fairer for all. Those who “cannot afford to heat their homes” for genuine reasons should receive state help, just as they should for housing.

Maybe that is something we should ask the general population. In the past we have discussed standing charges which allow high users to subsidise low users. My view is that high users (who may have a genuine need for extra heating) should apply for state help if they are struggling with their energy bills. I’m not a socialist, I have no interest in politics but I want to see fairness in our society and perhaps we should design our industries and markets with this in mind.

We’ve also discussed that many high users will not be eligible for state help. There are many energy companies and a wide range of tariffs; some suit low users, some medium users, and some high users. No one needs to be “subsidised”, just go to the supplier that suits your circumstances best. This is the advantage of having choice.

Too right, I feel the same. At least O.A.P have a Government Winter Allowance, thank goodness.. Helps them to keep warm.

Well O.A.P do get a Winter Payment from the Government thank goodness..

Graham P says:
3 November 2016

Just switched to Bulb Energy two weeks ago. It seems to be so new it’s not even listed in the Which list of suppliers. Should save a couple of hundred pounds a year with them – we’ll see.

Hi Graham,

Bulb Energy is now included.

Thanks for pointing this out.

I have joined ‘Flipper’. They check the market and if they can save you > £50, they switch you and take £25 for their work. Since I joined, they have checked my tariff about 3 times. Each time they could not find better. Moneysavingexpert.com carried out a group purchase deal and said I could do better if I changed. The saving was £3 per year, so I did nothing.

I would be interested to hear of others experience with Flipper.

This will bizzare to most, but, people need to understand that Elite bloodline families have controlled banking, energy, pharmaceuticals, media, military for a very long time. Governments are mere puppets in this game of power and control.
If I also told you that a technology known as zero-point energy was reverse engineered back in the 10950’s but has been denied to the masses because it would negate the use of fossil fuels, yes no more energy bills, the world could feed itself without any control from Governments or corporations.
These are the crimes against humanity that need to be exposed and stopped
Sounds crazy I know, but do some research and awaken yourself

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Duncan
For evil to survive all it takes is for good men to do nothing. we should not fear evil, they need humanity to do their dirty work and fight their wars. we do not need them, we should not fear them. This knowledge is becoming more widely known and accepted these days. Listen to Paul Hellyer the ex Canadian Defence Minister

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Duncan
Bit off topic, although it’s very much connected to the control of energy, amongst other things – money is the biggest controller of humans, or fear of not having any.

I know exactly what you are saying. I have friends who have had contact and they’ve been targeted all their lives with mind control technology which is now extremely advanced, it would scare most folks.

I rarely post on public forums because people are too taken in by the controlled mainstream media and busy lifestyles which leave them no time to research the truth – just how it’s supposed to be. On this occasion I just had to say something, couldn’t help myself.

in any event every time a person presses a key on their laptop or phone about 40 countries are recording it, so absolutely nothing is private anymore.

As they struggle to keep their secrets everyone is considered an enemy or potential enemy of the state, so, they’re working hard behind the scenes to censor the internet as quickly as possible. Apparently the US has just handed control of the issuing of domains to the UN.

As we make a final push towards Agenda 21 now Agenda 2030 new world order it appears we have moved very close to a number of pre-planned trigger events resulting in part from 911- financial collapse caused by a serious skirmish between the West, Russia and China.

The new world order, single currency, single military, government and eventually religion. Unfortunately the Cabal and their bosses (reppies) are extremely clever, deceptive and years ahead in their thinking and would have accounted for people uncovering their plans.
I don’t think this forum is ready for these truths and detail even though it’s all in the public domain if you care to look.

not CRAZY at all, yyour right.

Gillian ramsay says:
3 November 2016

Here in Shetland we have the most expensive energy in the country by far, and with storage heating, we have no choice of supplier. That should be illegal, as the company can charge whatever it wants!

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I thought that Scottish Power was controlled by a Spanish company, not a French one.

Same for me, I have a total heating total control meter. No one will touch it. Even though I used 40% less electricity last year my bill is going up by £40per month!

POOR YOU, and the weather UP THERE is very COLD in Winter.

Some time ago I joined ‘Flipper’. They monitor tariffs and if they can save you >£50 per annum, they switch you and take £25 for the work. They have access to all companies and have the motivation of the £25 fee to keep checking. They have checked my supplier about 3 times and say they can’t do better. I checked moneysaving.com and they found someone cheaper. It came to £3 per annum. I did nothing.

I would be interested to hear of other people’s experience with ‘Flipper’.

I regret I cannot comment on ‘Flipper’. However it takes me around 7 minutes max. to use “WhichSwitch? ” and check all the available deals compared to the one I am currently on. Deals are presented with the biggest saving first. Once you have used this you will see how easy it is. Just need your estimated annual consumption, your post code, and your existing supply/tariff. There really is no need to spend even £25.

Don’t forget exit charges, differences in standing charges, collective switching schemes, percentage of green energy (which differs between suppliers) and factor in the cost of a crystal ball if you move home and have no idea what your use will be. I wonder what the energy industry will come up with next. I wonder if obfuscation is part of the standing charge.

Why must we put up with all the different tariffs that every company has. Why not each company having one tariff each and compete with that, then we would have a fair competition between them all, a true competition. What and why do they have so many tariffs. There surly is no need for anything other than sell at straight price, that would then lead to a true competition and so simple to implement. All the variable tariffs in my opinion are coverups to make profits by stealth.

John, Brilliant common sense stuff. If the current government is really keen to help the poor, then they should mandate by law 3 or 4 different tariffs that every supplier must use. Then comparison will be easy. I think three or four tariffs to cover different user needs, light use, heavy user, heavy night use to charge electric car, etc.

I AGREE

Natural Gas is Bought by the Big 6 Companies a year in advance They bought this years Gas when the Price was low and since then it has fallen by 50%. They are now using the Excuse that the £ has fallen hence they have to put up prices surly the pound has not dropped 50% so there excuse does not wash the are Ripping the customers off so the can pay higher dividends and Bonuses to there managers instead of passing it onto their customers

David, my understanding is that forward buying by some is for several years, not just for one.

I AGREE, same as the BANK MANAGERS all tared with the same brush

Hi all, I am from N.I my electric bill is around £300 a quarter I know I’m paying to much but we don’t have much of a choice the power stations here are running old machines costing a fortune to run and the pass this on to the consumer, and they don’t give a hoot.

I agree – a lot of the jargon is above most people so the Suppliers simply rattle off info that doesnt make sense.
The info should be spelt out simply.
We were on only elec for over 12 years and couldnt change as our landlord didnt want gas – so it was anew learning curve to “meet a gs boiler etc and the terminology.

I don’t really care that much about the actual cost (I burn a lot of our own wood for heating). But I do care about service. I’ve found OVO to be absolutely brilliant — and even cheerful. They e-mail for a reading every month without fail into a simple, fool-proof, web site which lets you know exactly where you are. They’ve been paying up to 3% on my credit balance (now over £600 — it’s better than any bank!). But most of all they answer the phone in seconds — no more wasted hours of Big Six musak. We’re on a remote farm; but they arranged a meter change so that the engineer arrived within minutes of the agreed time, on the right day and with the right parts! I’m 70 and I’ve never experienced that kind of service from any of the so-called main providers. Not even once. They always let you down!

I was with OVO and was very happy with the service level, but changed to flow because their standing charges were too high

SSE are great for that sort of service I must say.

Not in my experience. An absolute nightmare. Despite them eventually giving me my own “service advisor” we never sorted the problems and I came close to suing them. I got compensation and dumped them. Just look at any set of customer reviews.

I agree with everything about what’s going on with all of the energy providers and agree things should be done

It is the standing charge that gets me really annoyed, It hits the poorest the hardest.

Standing charge is a con.there charging you for.gas and electic standing still in the pip’es.????.

Yes, wether your at home or not, like Telephone Standing Charges, Terrible.

Standing Chages are exactly WHAT IT SAYS…standing still, >>>>>>away on holiday ,whatever….they just keep adding those on every day, like Phone charges too.