/ Home & Energy

Energy bills – now is the autumn of our discontent

This time last year we knew we were facing a winter of discontent when it came to energy prices. All six of the large energy companies announced bill increases by as much as 20%.

There was a lot of noise in the media. The Prime Minister was so worried about price increases that he called a summit of energy bosses and consumer groups to demand action to help people struggling with gas and electricity costs.

But what about this year? As we’ve basked in August sunshine, energy prices have dropped down the political agenda and we’ve had no signal from any of the big energy companies that rises were on the way. Until yesterday.

Gas and electricity price rises

SSE is the first big energy company to put its prices up. And its customers are looking at average increases of 9% for both electricity and gas from 15 October.

I guess we shouldn’t be surprised. It feels like energy price rises hit us every year. Energy bills are rising, squeezing household budgets as train fares and petrol prices also spiral. It’s therefore no wonder that they’re one of the top financial concerns for consumers.

The Bank of England had already warned that energy prices would go up (although their prediction was a lower 2.5%). And – despite a commitment from one big player, Eon, that they will freeze their prices until 2013 – many people are assuming that other companies will follow SSE’s lead.

Who can you trust?

The companies will say that they are doing something. Most have launched ‘trust initiatives’ to improve their relationship with their customers after mis-selling scandals and other incidents of poor conduct led to incredibly low levels of customer satisfaction. Plus quite a few of them – SSE included – have also set about reducing the number of tariffs they have and making them simpler to understand.

The regulator, Ofgem, is reviewing the energy retail market, and the government is giving us advice. It’s telling us to shop around to get a better deal, join a collective switching scheme or improve energy efficiency to help insulate ourselves from these price shocks.

So, isn’t that enough? Absolutely not.

We need radical reform

We cannot go through yet another winter of tweaks to the energy market, when radical reform is needed.

It’s not enough for the energy companies to simplify their own tariffs, when they’re still impossible to compare against offers from rival companies. It’s not enough for Ofgem to only simplify so-called ‘standard’ tariffs but leave the better value fixed deals as confusing and complex as ever. And it’s not enough for the government to keep looking to consumers to take action on energy, when people are bewildered by the offers available and don’t believe that they are being charged a fair price.

Concerted action is needed this year by the government and the regulator to reform our broken energy market. This means that energy prices need to be properly transparent and tariffs need to be made simpler. Without this consumers will continue to wonder whether they really are getting a fair deal.

Comments
Profile photo of ChrisGloucester
Member

Whilst I’m all in favour of simplified tariffs they would be only a very small part of a much bigger problem. That being the ever increasing cost to the consumer to simply heat their homes.
Back in the days when energy supply was privatised we were all told that the resulting competition would benefit us all. Well, to me it doesn’t seem to have happened that way.
The big six suppliers seem to have a monoploy, it seems a cartel even if it’s not. Prices keep rising and profits keep rising, and there seems little the free market can do to improve the situation.
Energy is a basic element of national infrastucture and now we are at the mercy of profit hungry private ownership, worst still some of it foreign private ownership.
I’d re-nationalise the lot along with the railways and all other basic elements of national infrastructure. At least then we could control prices through the ballot box and any profit would come back to us, or at least the treasury.
Trouble is there are still people who think the free market approach works and even if there was a majority will to re-nationalise there is no money to buy back the “family silver”.
So apart from minor tinkering around at the edges with simpified tariffs, big switch initiatives and the like we’re stuffed, no money, fuel poverty is where many more of us will end up.

Member
Dave D says:
23 August 2012

We should feel very sorry for the energy companies: they are facing the prospect of profits which might fall slightly unless prices go up. That might upset the odd shareholder here and there and the poor MD might have to have a slightly inferior new Yacht next year.
Poor souls.

Now, having taken off my Sarcasm hat, I’ll add that I absolutely agree with Chris, Gloucester, above.

The energy companies are rather like the banks: they have been trained to believe that they had a God-given right to make massive profits at the expense of the public who have virtually no choice but to trade with them.

And of course we must not forget the £11bn (or has it gone up again) cost of the SmartMeter farce.

Member
Ramsay dunning says:
23 August 2012

There is an alternative to the big six. It’s cooperative energy. For the benefit of its members (customers) not absentee shareholders.
Coop energy also looked at the rising infrastructure (grid) and other costs, and announced a price rise this month. 2%, that’s right 2% not 9%.
As coop energy was already cheaper, it will end up much cheaper.
So, we can grumble about the big six, or change the way the industry treats customers by switching to coop,energy.
Easy as that.

Profile photo of ChrisGloucester
Member

Ramsay dunning.
Good idea to transfer to the co op but if everyone did I doubt the co op could cope, leaving most people still putting up with the profiteering nonsense we see with the big six.
I still maintain that a fundamental element of national infrastructure should operate for the benefit of the whole population and that this is only possible if it’s nationalised and there is in place a strong independant body to oversee and ensure efficient operation and fair pricing.

Profile photo of william
Member

I’ve tried comparison sights and the never seen the co-op listed.

Member
Dave D says:
23 August 2012

I’ve not been with the Big 6 for years – I use Ecotricity for Gas and Electricity. I’m not tempted by the Co-Op because their customer service levels in their bank and their shops is so dire – ***a GREAT shame*** because in theory their ethical stance means that they should be THE most attractive provider of them all.

Personal preferences aside, I completely agree with Ramsay dunning AND with Chris, Gloucester’s original post. There is a choice (of sorts) which we can exercise and more people should, but the fundamental problem with the energy supply industry is that is was ever privatised in the first place.

Given that I think re-natiuonalisation is as good as inconceivable, exercising choice to move away from the Big 6 is the next best option.

Profile photo of wavechange
Member

One of these days I might join you Dave, but Ecotricity seem a bit obsessed with wind power and I think we need to have a more balanced approach to our move towards renewable energy sources of renewable energy. Avoiding using the big companies is definitely the best reason for switching.

I am a bit older than you and well remember how inefficient most of our nationalised industries were. I think that the answer is private industries that are efficient through competition but closely regulated to avoid the problems that we are all aware of. Re-nationalisation is inconceivable, as you say, so we need to get on with the regulation.

Profile photo of william
Member

I wonder if people realise how much of their bills isn’t actually going to cover the gas and leccy they’ve used, but to pay people with solar panels and other green schemes and only today I was told all the companies will probably be hiking prices to build a war chest in preparation for rolling out smart meters as the government is contributing and so it’s down to the main companies to fit new meters to every house in the country when smart meters are actually rolled out. It would be nice if a paid for what I used.

Profile photo of wavechange
Member

I agree. It would be a good start to tell us how much extra we are paying.

I think that those generating their own electricity should be paid the same per unit as they are charged for electricity. Anyone who wants a smart meter should pay for one.

I am happy that the government should offer some subsidy for installation of solar panels, just like it does for those who install house insulation, etc.

Profile photo of dave d
Member

Absolutely agree with Wavechange and partly agree with William. The only disagreement I have with William is that (like Wavechange) I think it’s quite right that the energy companies should pay towards the renewables and that is bound to come from our payments.

I would be more inclined to agree with William on that point too if the energy companies were not making such obscene profits even after paying towards the renewables.

Profile photo of rod maxwell
Member

One thing that really annoys me is cancellation charges. I think these are fair enough when the conditions of the contract remain the same but if the price rises then these should waved as the deal is not the one signed up to.

The other thing I think needs changing is the time to swap suppliers. This is mostly done on-line so there is no excuse for swapping suppliers to take any more than a couple of days.

Profile photo of william
Member

@rod, I think you’ll find that your legally entitled to change without penalty after refusing to accept a price rise, as long as you do it within 30 days. Although you might want to get confirmation of that.

Profile photo of rod maxwell
Member

> think you’ll find that your legally entitled to change without penalty after refusing to accept a price rise

Thanks. Could Which? confirm this as it isn’t something I am aware of.

Profile photo of dave d
Member

Yes, that would be a VERY useful piece of information to have – anyone from Which? able to point us towards a piece of legislation we can throw at suppliers?

Profile photo of william
Member
Profile photo of Nikki Whiteman
Member

Hi all, sorry for my late reply on this – I wanted to double-check. But yes, william is right – you can reject these price rises by writing to your energy supplier. Our James mentioned this in a Which? Conversation a while ago – https://conversation.which.co.uk/energy-home/ask-which-overcharged-energy-prices-go-up/, but I’m going to see what else we can do to raise awareness of this rule.

The key thing to quote is Ofgem’s license conditions 23 and 24. Here’s the relevant advice from James’s convo:

“The rules energy suppliers have to comply with say that if they increase any of the charges set out in a customer’s contact then the customer has a right to get out of that contract. These include the cost of energy, but also cover other types of charges, such as late payment charges or changes to discounts.

As long as you tell your supplier you want to leave by the date the increased prices take effect, and your new supplier contacts your current supplier within 15 working days to tell them you’re switching, you will not have to pay the higher charges.

It’s particularly important to bear this in mind if you’re on a tariff where you have to pay exit fees if you break your contract early – these fees cannot be charged in the event of a price increase. If your supplier tries to charge you an exit fee or says you will have to pay the higher rates until your switch goes through then complain and refer them to Ofgem’s Standard Licence Conditions 23 and 24.”

Profile photo of dave d
Member

Brilliant info Nikki – thanks. I hope that I won’t want to change from Ecotricity but I think it’s important that this information is widely available for everyone.

Profile photo of dave d
Member

Utterly off topic, but anyone got any ideas?

My avatar only appears correctly these days when I sign in from my main computer. If I use laptop or mobile device (which I have done a lot over summer as I’ve preferred to be outside rather than in the study) it doesn’t work.

It’s got be completely flummoxed, even with all my IT background!

All devices are Apple, so it’s not a PC / Apple difference.

Profile photo of wavechange
Member

I had assumed your cat kept going out for exercise. No doubt you have confirmed that the problem exists with different browsers. For the record, I’ve never had this issue using three Mac laptops (Safari browser) running three different versions of OSX and an iPad.

I wonder if something has become confused and your account may need to be reset by Which? It is probably irrelevant but you have used the same avatar for your current username and your old one, which included your surname. Best of luck.

Profile photo of Patrick Steen
Member

Hello Dave D, make sure you’re logging in correctly. You may find that your PC/laptop is auto-filling the wrong email address, which won’t pick up your avatar. However, if you make sure you log in here https://conversation.which.co.uk/login/ then you should be ok. If you’d like to talk about any technical issues please email us: https://conversation.which.co.uk/contact-us rather than make a comment. Thanks.

Profile photo of dave d
Member

Thanks Patrick and Wavechange. I think I’ve solved it thanks to Wavechange’s long term memory. Won’t go in to details here – off topic, but just wanted to say thanks to you both.

Member
Charles Hobson says:
24 August 2012

While agreeing with the comments about the urgent need to reform the broken energy market, I’d like to differ with some of the comments about the Co-op as an energy supplier. I swapped to them very painlessly about 8 months ago and have nothing but praise for the way they handled this. The key thing to keep in mind is that they are member driven not profit / shareholder driven. That culture makes them operate in a very different way.

On the subject of customer service, I transferred from SSE to EDF previously and it was a nightmare that lasted some 4 months and involved over 60 emails!

Profile photo of John Ward
Member

I echo Charles’s comments. I switched to the Coop Energy and really like the way they operate and their personal service on the telephone is outstandingly good. I also changed to their new tariff under the Which? Big Switch and am really pleased I did.

Profile photo of richard
Member

What else do you expect when the Utilities were privatized? – prices for the consumer? This is exactly what I expected when Thatcher sold off the Utilities. It is called private sector greed. Re-nationalise anybody?

Profile photo of philthunder
Member

This latest round of price rises makes Which’s “The Big Switch” campaign look a very wasted exercise for Which and anyone that tried to switch. Especially, after Which lost the forms or sent them incomplete to the Co-Op. Did anyone actually complete a successful switch onto the Which agreed special rate? All that drum banging and nothing has changed!
I was already with the Co-Op very painless switch about 18 months ago and have nothing but praise for the way they handled this, excellent service on their pioneer tariff.
I signed up for “THE BIG SWITCH” and was expecting Which to handle the situation in a professional manner, not sweep our promised “BIG” savings under the carpet. I am still waiting on Which for an update from July on what went wrong! For an organisation that investigates other company’s poor service I expect better.
As for Dave D’s comments on the service from the Co-Op shops and banks, I have found them a revelation. EDF spent 6 years getting my tariff sorted after a meter change, putting me back on a dual tariff and also billing me for a Virgin Media cabinet outside my home. PowerGen put me on the dearest tariff after the year’s “special” finished. My previous bank was pretty poor and have you tried the service in the Big Supermarkets. One lot of meat I bought had fresh mince wrapped around brown centre meat, “What’s the problem” customer service said!