The folks at E.ON have been told to cough-up £7m after missing a target for delivering advanced electricity meters to their business customers. Watchdog Ofgem warned the energy company that there might be more penalties, which happens to include another £7m fine and a potential for a sales ban, if they don’t sort out their ‘poor record’.
Other energy companies would be wise to take heed.
Ofgem said that E.ON had been set a target in 2009, to fit and supply around 20,000 business customers the meters, but the company didn’t complete the job. This was part of a roll-out designed to modernise the energy sector, and of course, help customers to get better service by having smart meters, so they can control their bills and usage.
The watchdog aren’t happy with E.ON and said that the energy firm was “unable to demonstrate that it took all reasonable steps to fulfil its required meter rollout”. It added: “The supplier failed to plan and monitor its roll-out and its senior management didn’t do enough to ensure it complied.”
“E.ON has also gained financially by avoiding the costs of installing and operating the new meters.”
The regulator warned that, if E.ON were “not compliant” after a further six months, then they might be hit with a sales ban. As for the current £7m fine, the money will go to the Carbon Trust, which who offer energy saving audits and advice, and installs energy efficiency measures for smaller companies.
A spokesman for E.ON said: “Installing advanced meters to tens of thousands of business customers across the country was always going to be a significant challenge and one that threw up a variety of hurdles for suppliers to overcome. That said, we cannot, and will not, overlook the fact that we did not do enough in time to meet the deadline and in that regard failed to provide the efficient service our business customers demand and deserve.”
“In the last 18 months we have made some further progress and we have invested heavily in increasing our capability and we are taking all reasonable steps to get these meters installed.”
Anthony Pygram, Ofgem senior partner with responsibility for enforcement said: “It’s unacceptable that E.ON failed to roll out advanced meters to these business customers on time.”
“Customers have lost out on receiving better information about their energy consumption and the opportunity to control costs. Unless E.ON improves their poor record, they will have to pay out even more and may face a sales ban.”
“The roll-out of advanced meters has the potential to transform the energy market. We expect all suppliers to learn the lessons from this ahead of the domestic smart-meter roll-out, in particular the need to start the process in good time and ensure senior managers are committed to delivering on time.”
British Gas and Npower are next on Ofgem’s list.
Have you heard about the Government Electricity Rebate (GER)? Well, in their own words, “it is a £12 government contribution to help lower the impacts of these Government environmental and social policy costs on consumer energy bills. It is part of a wider package of measures which will reduce household energy bills by an average of around £50 per year in 2014 and 2015.”
Got that? No? Well, no rush, because in due time, you’ll get the Government Electricity Rebate directly from your electricity supplier. It is rolling out over Autumn, and most households won’t need to do anything to get the rebate as it’ll happen automatically.
Some people, for example those living in park homes, aren’t eligible for this rebate, but everyone else is. If you get your electricity through a pre-payment meter, you may need to actively redeem the rebate yourself. Your supplier will inform you and you’ll probably get a voucher which you can swap for credit, or your supplier might send an automatic rebate to your electronic credit, which will hit when you top up.
If you think you should be getting a rebate, but haven’t, then you need to contact your supplier and see what they’re playing at.
The National Grid revealed that the forecast capacity margin – that’s the difference between the supply that’s available, and the predicted peak demand – is at a measly 1.2%.
The energy botherers said that there’s an “increased likelihood” they are going to have to use their “contingency balancing services”, so they can keep the country’s power on over the next few months. There’ll be riots if the power goes off while Christmas dinner is being cooked.
So, in a bid to stop us all from sitting in the dark and having to talk to each other, the National Grid has had to kick up some power stations to give us all some extra power, even though the plants in question have been mothballed.
Seriously. 2015 in a developed country and we’re looking at blackouts. Preposterous. Is that how bad our infrastructure has got? Someone boot the Government up the arses to sort this out. That said, there’s no point talking to them, as the government want to close nine power stations by the end of 2016.
The GMB, big fans of the Tories, clearly, said: “We have the bonkers position where National Grid is using consumers’ money to pay firms to stop work in order to avoid winter blackouts. [It] hides this farce with the phrase ‘energy balancing’. That and bringing unused, inefficient power production back into operation are the special measures National Grid is being forced to rely on to keep the lights on, and the cost is added to consumers’ bills.”
The government have actually commissioned EDF and two Chinese firms to create a new £24.5bn nuclear power station at Hinkley Point in Somerset, but that won’t be giving us power for a decade yet.
Stock up on candles, and buy a camping stove, eh?
Lightbulbs. The plastic carrier bags of the energy-saving world (doing a perfectly fine job, but an easy target for Energy Saving Measures) have been fiddled with for years, with the EU banning normal incandescent bulbss back in 2011. Even the supposedly better Halogen bulbs are scheduled for extinction in a few years’ time, but the standard replacement CFL (compact fluorescent) lights aren’t actually bright enough to find your way to bed at night. So what is the crack with energy-saving blubs and should we just bite the bullet and replace our bulbs now- while we’ve still enough light to do so?
At the moment you have three options for bulbs- halogen, CFL and LEDs, although halogen bulbs were doomed to go the way of incandescent bulbs in 2016, although they have earned a stay of execution from the EU until 2018 so far. You can’t even work out what bulbs you need in watts as (being part of the point) the watts used by the old incandescent bulbs far exceeded the equivalent energy use of the new bulbs; here’s a handy conversion table using the new-fangled notion of lumens:
Obviously, LEDs are by far the lowest energy guzzlers- and they also last the longest at around 25,000 hours of use. So why don’t we all immediately switch? Well, LED bulbs are also the most expensive. Nevertheless, there has to be a point at which it’s worthwhile making the switch, doesn’t there?
The handy folks over at the Centre for Sustainable Energy (CSE) worked out the equivalent running costs of using the three different types of bulb if you had the lights on all the time, or for six hours per day, as well as the comparable cost per bulb.
As you can see, using LED bulbs saves a little over £4 per year in energy but costs £6 more than CFL bulbs, meaning it would take two years to be better off, but at least you would be able to see (a main complaint against CFL bulbs is how long it takes them to get to (so-called) full brightness, even though the CSE now boasts that modern lights can get up to 70% bright inside one whole minute). And if you compare against the halogen bulb, you need to remember that while you’d manage a year’s continuous use with one LED or CFL bulb, you’d need at least four (and probably five) halogen bulb, meaning the cost of the bulbs is similar, but the energy bill saving is actually over £46 compared with LEDs. No wonder councils are retro-fitting all their lights with LEDs…
But who actually has the lights on all the time? If you look at the figures for six hours use a day, the actual cash savings are far lower, and it would take five years to earn back the extra cost of an LED compared with a CFL bulb. When looking at Halogen, you’d probably squeak by with one bulb too, but even so, the cost saving on your bills for one year will more than cover the extra cost of the bulb.
So it seems that, despite annoying EU nudge tactics, LED will be the way to go, purely from a protecting your pocket point of view. Only problem, of course, is how much it costs to change all your fancy light fittings
Everyone knows that being a lazy bones costs money in this world, but now someone’s actually quantified how much extra people could end up paying just by not making a quick phone call or internet click. Using uSwitch figures, someone slipping on to a standard variable energy tariff this week if their fix ends on 30 September could end up paying £186 a year more for their energy.
Despite the ongoing investigation into whether suppliers are overcharging customers, an estimated tens of thousands of customers will be affected in the next few days as their “fixed” fuel tariffs come to an end, after which their energy firm will revert them to a more expensive “standard” rate.
It’s not surprise that standard rates are more expensive than the periodic deals offered, but taking some as examples- a ‘Value Plus’ Extra Energy customer will see price increases of £186 for customers on its “ValuePlus” fixed tariff, First Utility’s “iSave September 2015″ customers will pay £139 extra unless they switch to another tariff, and British Gas “discount fix September 2015″ customers will be £121 down by sliding onto a standard tariff- all according to analysis by uSwitch.com
The average figures for the 23 fixed tariffs that expire on September 30 suggest that suppliers charge some customers £80 to £180 extra for the same energy used by other customers on cheaper deals- although energy firms have long lobbied to maintain the right to charge higher prices for standard tariffs, as, after all, customers can switch to the cheapest non-standard tariff if they ask to. And as we have previously suggested, the CMA has also warned that forcing suppliers to take care of those who don’t take care of their own tariffs would push up costs for all customers-its ongoing investigation found that energy firms can only afford to offer cheaper tariffs “if a proportion of customers revert to the more expensive ‘standard variable’ rate.”
But there is (only) one firm whose standard variable rate is actually cheaper than at least one fix. Scottish Power’s one-year fix ending on Wednesday is £100 more expensive than the firms’ standard rate after a 4.8% price drop in February after Government pressure. Good call if you’ve been on that one for the last 12 months…
Roger Witcomb, Chairman of the energy market investigation said “Many customers do not shop around to see if there’s a better deal out there – let alone switch. The confusing way energy is measured and billed can make comparing deals understandably daunting.”
uSwitch.com calculate that the current cheapest fixed tariff the 30 September people could switch to costs £841 based on “typical” household usage, (3,100kWh of electric and 12,500kWh of gas per year) from Extra Energy- whose standard rate is the one costing the £186 more, correlating with the idea that it’s the lazy folks who compensate for the savvy switchers…
Two years ago, Britain’s small energy providers had 2.6% of the market. Since then, the Big Six have been acting like thundering arseholes, and as such, the smaller companies have been making gains and now have 13.4% of the market.
The little independents have been getting loads of new customers in the year to July 2015, while the Big Six managed to lose 660,000 accounts in the same period. The large companies have been offering dismal customer service, and the Competition and Markets Authority recently said that Big Six had overcharged customers by roughly £1.2 billion a year.
“Eventually customers who are on standard tariffs realise that they’re kind of getting ripped off and they look to the market and we’re out there with a great price, with a different message,” said Ed Kamm, chief customer officer at First Utility. Kamm’s company have doubled their customer base in three of the last four years.
He added: “We won’t be satisfied until many more people are switching and saving. We believe the key to this is a fairer, more transparent energy market to ensure consumers are getting the best deal and money can be put back in people’s pockets.”
Npower said that they’ve lost around 100,000 household customers between late 2014 and mid-2015, and everyone else is losing theirs too.
Which!!! honcho Richard Lloyd said: “The Big Six have repeatedly failed to deliver a decent standard of service so it’s no wonder customers are starting to leave them in droves. Despite this the CMA has found there is a lack of competition which is leading to people paying much more than they should.”
“We now need the competition inquiry to bring forward radical changes to boost competition, introduce fairer prices and encourage more households to switch to better deals.”
There’s a lot of hate and a lot of explaining to do, so this isn’t much of a surprise really.
The regulator’s new deadline has been moved from 25th December to 25th June, which means investigators can have a Christmas dinners, but they will be releasing their provisional proposals in January.
The CMA also have to look into the problems with the private healthcare market, as well as reviewing BT’s takeover of EE. They’ve got a lot of work to do, clearly.
The regulator recently said that the British public had paid around £1.2bn a year too much for domestic energy from the big six providers. This is a claim that the Big Six deny, obviously. There’s talk of a temporary price-cap while this all gets sorted, but nothing concrete has been said about that yet.
Roger Witcomb, chairman of the investigation, said: “As the most comprehensive investigation into the energy market since privatisation, this is a once in a generation opportunity to shape the future of this market for the better. It’s important that we get it right.”
“This is a huge programme of work and we have concluded that we could not complete it by the original statutory deadline. We have therefore decided there are special reasons for extending the reference period which will allow us some extra time to finish the job.”
We all know that energy companies have been taking the Michael for years, a view confirmed by the CMA in a report earlier this year. However, there are now calls to take thing a little further, and to force the energy companies to have a more reasonable default tariff to protect the vunerable and the ‘sticky’ (non-switchers).
Shadow energy secretary Caroline Flint is now calling on the government to introduce a protected energy tariff for vulnerable customers as a more robust response to investigations of overcharging in the energy industry.The tariff would be set by the regulator and target those least likely to switch tariff.
Earlier this year that the independent Competition and Markets Authority (CMA) concluded that households were being overcharged by £1bn a year, but the only action the government had taken was to write a letter the big six energy companies, a letter mostly shrouded in freedom of information exemption secrecy.
The CMA claimed the big six had been making more than £1bn a year by overcharging 70% of customers who are on the standard variable tariff, suggesting in July that a transitional regulated safeguard tariff could protect consumers while the energy market is fixed.
The groups least likely to switch are also the most vulnerable and include those on low incomes, who have low qualifications, who are living in rented accommodation, and those who are above 65. CMA research showed 35% of those whose household incomes were above £36,000 had switched supplier in the last three years, compared with 20% of those whose household incomes were below £18,000.
Flint’s proposals suggest a protected tariff model where each supplier must offer one tariff where the price is set by the regulator and any prices changes must be approved by them. This becomes the default tariff for vulnerable consumers, or consumers who do not switch. Suppliers are, however, free to offer other tariffs at a price of their determining.
Instead of being a price cap, as in pre-privatisation days, Flint argues that this model would act as a price to beat for competitors, delivering choice for those that want it while ensuring fair prices for those who do not engage.
So what do you think? Is this a good idea, or is more regulation and price competitiveness at the not-bothered-about-switching end going to automatically result in price rises for those of us who do switch and save?
While that seems like good news, there’s criticisms that the energy supplier isn’t doing enough for customers and that the drop should’ve been more substantial, considering the size of the decrease in the amount British Gas pay for their gas.
Comparison website uSwitch is particularly unhappy, and has accused British Gas of “short-changing” everyone.
“British Gas is the biggest energy supplier so they should really be market leading, setting the trend for the others to follow suit,” Ann Robinson, uSwitch’s consumer policy director, said. “Although the price cut is welcome, I wanted [British Gas] to do far more and almost shame the other companies into taking action. But instead we get a price cut that is far smaller than it should be. It short-changes their customers and lets the other suppliers off the hook.”
“I want all of the suppliers to give customers a decent price cut to reflect what has happened to wholesale prices. We have seen these prices falling; they are at a really low level. And we are not talking about months – it has been well over a year now.”
“The reason suppliers give for not cutting prices more is that they buy their stock in advance, and thus was purchased at a pricier level, but that excuse no longer holds water. Now is the time for big suppliers to treat customers fairly.”
British Gas sent a spokesperson out to defend the company. They said: “We’re cutting our gas prices by 5% for almost 7 million customers, taking £35 off the average annual bill. This is the second time we have cut prices in six months – that’s a total saving of more than £72 over the next year.”
“We always cut our prices by as much as we can, as soon as we can, when we see a reduction in our own costs, and we were keen to do this ahead of next winter. There are many moving parts to the bill, some have gone up, others have come down but in the round we felt able to cut gas prices by 5%.”
Npower have been so crap for so long, that recently, they were ordered to give power away for free by way of apology. That’s not say things have been fixed – they said themselves, that the omnishambles that they’re currently running will run into 2016.
So with that, it shouldn’t surprise anyone that the boss – Paul Massara - of the lousy energy firm has left his position ‘by mutual consent’ after the energy company posted ‘unexpectedly negative’ half-year results. Unexpectedly negative! The delusion is palpable at Npower, clearly.
Massara’s oversaw company results earlier this month, which showed that Npower’s profits had dropped by two thirds. Of course, this might be something to do with customers leaving the company en masse, because they’ve been so thoroughly useless for such a long time. In the last year alone, Npower lost 300,000 customers.
The company are still being investigated by regulator Ofgem for their shambolic behaviour, and it is almost certain that there’s going to be some big fines waiting for them in the future.
Npower’s parent company, RWE, said that the exodus of customers, coupled with their own incompetence, has hit UK profits by 65%. Again. That’d be Npower who have just said that their negative results were ‘unexpected’.
RWE chief executive Peter Terium said: “At this time we need a CEO at RWE Npower who will focus on fixing the basic process improvements and has a track record of implementing operational process changes.”
This, of course, has put a dent in their profits (good) and that they’ve acknowledged that they’ve lost a load of customers in the process. Their parent company, RWE, said Npower’s half-year profits were down 60% to £38m.
Customers (or, presumably ex-customers by now) have seen bills not being sent at all, or multiple bills being sent to homes. The whole thing has been an absolute nonsense.
Only last year, Npower said that they were getting a hold of the problems and managing to get on top of them. Obviously, that isn’t the case, which most of us already suspected. Thanks to this, Npower were forced by the Energy Ombudsman, to give free energy to customers who had waited far, far too long to get their complaints dealt with.
Unsurprisingly, Npower were the most complained about energy company in 2014. It will be no surprise if they end up topping the tables again at the close of this year.
Npower are pretty hopeless. And that’s putting it kindly. They’ve been so dire when it comes to handling complaints, Ofgem have ordered them to give free energy to customers whose complaints have not been resolved in good time.
The regulator said those that had an Ombudsman ruling, that is outstanding against npower (for more than 28 days) should benefit from this and have their debts written off. Of course, npower are still shruggling, wobbling their bottom lips and saying that it is all the fault of a new billing system they brought in.
They’ve been using that excuse for ages now. So long, that they’ve confessed that they’ve had problems with the bills of 700,000 households. Useless. Absolutely useless.
And this investigation was kicked off by Ofgem over a year ago, and they’re not finished yet, doling out fines as they go along, such is the magnitude of npowers haplessness.
With all this in mind, npower said: “For these 1,000 customers, npower will write off any debt on their account and also provide free energy until the ombudsman’s rulings have been applied in full. This measure has been agreed with Ofgem and the Ombudsman. If there are any customers similarly affected after today, 21 July, we will review on a case-by-case approach in line with the Ombudsman’s current policy and also provide free energy where the remedy has not been completed due to our process or system.”
“Npower continues to make steps to improve its service, including halving overall complaints and reducing Ombudsman complaints by nearly 10% since the beginning of this year, but sometimes a delay in finally resolving a complaint can occur, for which we apologise.”
The company is called Our Power Energy, and will launch with 35 founder organisations, which includes housing associations and local authorities, and wants to be doing business by the end of 2015 as an Ofgem-licensed gas and electricity supplier.
Our Power Energy want to cut utility bills for disadvantaged communities by up to 10% cent compared with the usual shower that make up the Big Six. And they think that their buying power will help save communities up to £11 million on bills over the next five years.
This particular scheme has been backed with a very healthy £2.5 million loan from the Scottish Government and £1 million from Social Investment Scotland. Could something like this work in the rest of the UK? If it works in Scotland, then you can imagine it branching out or, being taken up by other initiatives.
Scottish Social Justice Secretary, Alex Neil, said: “Fuel poverty is at its highest level in a decade with fuel prices having risen by an inflation-busting seven per cent between 2012 and 2013. A recent investigation by the Competition and Markets Authority (CMA) found that millions of energy customers are paying too much for their energy bills.”
“That is why the Scottish Government has invested £2.5 million in Our Power. It will be the first independent and fully-licensed energy supply company registered as a non-profit distributing organisation owned by its members.”
“This ground-breaking company will make a real difference to tens of thousands of low income households who are currently disadvantaged in the energy market and struggling to pay their bills.”
Yesterday, British Gas announced a 5% price drop on bills, and it looks like the rest of the Big Six will be following suit.
Of course, Npower, EDF, E.On, SSE and Scottish Power don’t want to be missing out or made to look like awful, greedy, upright swine compared to British Gas. What do you mean that’s what you think of them, regardless?
Energy companies usually announce their changes in September, but with British Gas making the move earlier than usual, you’d expect the rest to follow suit.
If that’s the case, there’s a lot of money to be saved – whether they could’ve passed on more savings is up for debate (we think they could have) – with Npower having around 5.1m customers in the UK, EDF Energy serving 5.5m domestic and business customers, E.On UK having 5m domestic and business customers, Scottish Power having somewhere in the region of 5m domestic and business customers and SSE with over 8m customers. That’s a lot of people getting money off their bills, which we should be vaguely grateful for.
However, the problem is that the industry has seen much bigger drops in wholesale energy costs, so really, they should be doing more for their customers.
Alongside all this, the Treasury has launched an investigation into the sector, regarding the savings that utilities companies could, or should be passing on to everyone. If they are found to be stitching us up, then the government may well intervene… but then again, they probably won’t because, as we all know, all politicians are arseholes.
British Gas has announced a 5% cut in gas bills, which will give the average customer a saving of £35 per year. Now, normally, that’s pretty good news, but this is British Gas who have, to put it bluntly, been taking the piss for years.
Even though this is the second gas price reduction in six months, which combined, is supposed to save us £72, British Gas have enjoyed a 25% fall in the wholesale cost of gas since December 2014. While any reduction in bills is welcomed, they could have absolutely passed on more savings.
Stephen Murray, from MoneySuperMarket and not very happy about the whole thin, said that this price cut is “long overdue, and may seem underwhelming compared to how low wholesale prices are”.
Of course, British Gas have an answer for everything, and they’ve said that other costs had gone up.
Mark Hodges, from British Gas, said: “If you look at transmission costs – the cost of the pipes that move the gas around the country – actually those costs have been going up steadily for a number of years.”
Anyway, the drop in price will come into play from 27th August and will benefit 6.9 million customers.