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Would you switch to a smaller energy provider?

Customers of medium or smaller energy providers are more satisfied overall than those with the ‘Big Six’. Should you switch to a smaller provider?

A quarter of us are now customers of energy firms which aren’t the original ‘Big Six’. Some of these newer and smaller firms offer fantastic service, while a few are seriously letting customers down.

The recently-published results of our annual energy companies satisfaction survey revealed the best energy firms, according to their customers, as well as the ones to avoid. (Full results for Northern Ireland can be found here.)

Top scorers

The top-scorers were Octopus Energy, Ebico, Robin Hood Energy, So Energy and Tonik Energy. The worst supplier overall was Solarplicity. Spark Energy was the second-lowest ranked.

What do all of these have in common? They’re new, relatively small (at least in comparison to the Big Six), energy firms. A couple are not-for-profit. A couple sell only 100% renewable electricity.

Overall, we found that customers of medium or smaller energy providers are more satisfied with them, and rate them better on everything from customer service to bills to value for money, than customers of the Big Six.

Which? Switch: compare gas and electricity prices

But it’s not as simple as switching from the Big Six to get better service or prices.

Smaller suppliers are streets apart in how well they serve their customers: some are top of our rankings, others are seriously letting their customers down. Plus several have gone bust, and many have raised their prices. So choosing a supplier can feel a bit of a minefield at the moment.

Downsizing

Over the last four years, I have been a customer of four different gas and electricity suppliers. I’ve tried Big Six, medium-sized, and most-recently a smaller, newer market entrant.

My current, smaller, supplier doesn’t offer a breakdown of my energy usage via an online account, unlike my previous supplier. Perhaps it’s too new to have built this, undoubtedly expensive, feature yet.

But I never actually saw the fancy offering from my previous supplier: it wasn’t able to fix my online account login issues in the six months I spent as a customer.

It also doesn’t have answers to any question you might have on its website, ready and waiting for when you need help at 11pm on a Sunday.

Simple things

But what it does do is respond to my emails (usually within a day), answer my questions precisely and does what it says it’s going to do.

These are simple and basic things but mean I feel friendly towards my supplier, rather than frustrated.

Revealed: the fastest energy firms to answer the phone

Plus I’m never in doubt that my bills are accurate or worried that I’ll have to pay more than I expect. It prompts me to send meter readings every month, and gives me a few days warning before it takes my direct debit.

I can enter my meter readings online (no more using up my minutes phoning in my meter readings). Again, simple things, but certainly reassuring.

I can’t promise I’ll stick with my smaller supplier for the long-term but, for the moment, what it lacks in fancy features it more than makes up for in getting the basics spot-on.

Have you switched to a smaller energy company? What differences have you noticed? What do you like about its service and what do you miss?

Comments

Another small energy company has gone bust according to this Which? press release:

Which? responds as Brilliant Energy ceases trading
11 March 2019
Sarah Threadgould, Which? Chief Customer Officer, said:

“The collapse of energy firms is becoming far too commonplace and consumers must not be made to shoulder the costs for these failures. It is vital for the regulator to press ahead with measures to ensure that current and future suppliers are financially sustainable and able to deliver excellent customer service.

“Ofgem must ensure a smooth transition for those customers affected. People should not let energy suppliers going bust put them off shopping around for a better deal. Once affected customers have been moved to a replacement supplier, switching is still by far the best way to find a company that offers good customer service – and you could save more than £300.” https://press.which.co.uk/whichstatements/which-responds-as-brilliant-energy-ceases-trading/

It seems that this company was struck of on 21 August 2018, so why has it been able to continue trading. The 17,000 customers will not lose out but it is yet to be announced which company will take over. Nothing in the filing history for Brilliant Energy suggests to me that it might be a viable company: https://beta.companieshouse.gov.uk/company/07283391/filing-history

As Which? has stated, Ofgem must do its homework and decide if companies are likely to be sustainable and cope, for example, with a significant rise in wholesale prices of energy. Surely this is obvious. We have now had about ten small energy companies fail and I wonder if Ofgem is fit to do the job. Perhaps the effectiveness of regulators needs to be assessed.

DerekP says:
12 March 2019

Indeed.

Ofgem were wrong to allow so many entrants into the energy marker without them demonstrating financial resilience. There were over 60 at one count. I believe some of this were opportunists, taking money out of the business before it failed in inappropriate ways. Some were no doubt naive. Some are run by local authorities, providing them with bail outs, by people who do not have business acumen; they, too, would have otherwise gone broke.

Some fail because their fixed price deals become unsupportable when wholesale costs rise beyond what was envisaged, and the company does not have the resources to buy energy ahead to protect against that.

Unfortunately, suggesting that “consumers must not be made to shoulder the costs for these failures.” would leave the deprived customers with their account credits lost; a failed supplier will not return those. So all consumers will pay through their energy bills.

Ofgem some while ago were changing the terms of licensing new entrants so hopefully this problem will go into decline. It does not seem possible to deal with the present incumbents; there will, no doubt, be a process of natural selection but at cost to us all.

So, is Ofgem fit to to their job? As you say, we all contribute to the cost of failure. I hope that Ofgem is monitoring the performance of all companies in the market to look for signs of potential trouble.

Which? has rightly been critical of larger energy suppliers for poor service. It’s well established that some companies have allowed some customers to build up large credit balances. I have had this problem with Scottish Power and e.on, and judging by comments on various Convos this is not uncommon. I wonder why Ofgem has not stepped in to put an end to this practice.

I’m very grateful that we do have regulators but perhaps their effectiveness needs to be assessed.

Maybe the regulators need a …..regulator? They act on behalf the government and presumably are scrutinised by select committees.

“Ofgem is the Office of Gas and Electricity Markets. We are a non-ministerial government department and an independent National Regulatory Authority, recognised by EU Directives. Our principal objective when carrying out our functions is to protect the interests of existing and future electricity and gas consumers………

Our governing body is the Gas and Electricity Markets Authority ………

The Authority members are appointed by the Secretary of State at the Department for Business, Energy and Industrial Strategy and include five Non-Executive Directors………

The Authority’s powers and duties are largely provided for in statute (such as the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000, the Competition Act 1998, the Enterprise Act 2002 and the Energy Acts of 2004, 2008, 2010 and 2011) as well as ruling European Community legislation in respect of energy regulation.

The smaller energy companies rely almost entirely on household customers and do not have the ballast of commercial, industrial and public service customers which provide greater stability for forward procurement and usually have long-term contracts. Household customers are more prone to switching when they see a better price or their existing supplier increases the tariff so there is more volatility at the smaller end of the market. Ofgem should be factoring this into their appraisal process when judging resilience.