SSE is the energy company we all love to hate. Or one of them. In the same week that another independent provider breaches the £1,000 floor (First Utility), SSE admits that its faulty equipment has overcharged around 16,000 customers for their energy use.
Faulty electricity meters have caused the problem, with incorrectly calibrated meter clocks failing to correctly identify ‘Economy 10’ energy usage. This means that cost-conscious consumers who had tried to schedule their energy usage for the off-peak times were still being charged at the peak rate, which is currently 74% higher. The off-peak rate is 9.45p/KWh and the peak rate is 16.4p/KWh.
SSE said a “manufacturing fault” with one batch of electricity meters meant they were incorrectly switching back an hour after a power cut in winter. It also admitted a separate issue where meters had been “installed with the off-peak times set incorrectly for the customer’s supply distribution area”. Which suggests human, rather than mechanical error. The problems are estimated to have affected around 8,000 customers each.
SSE will now write to all customers who may have been affected to inspect their meters, but said it said it was impossible to tell exactly how much money customers had been overcharged. By way of redress, SSE has said it will attempt to approximate the loss and compensate customers by recalculating bills as though 70% of usage had been at off-peak times, rather than the average 50%.
“This recalculation method should work out favourably for the vast majority of customers who are affected by the fault,” said SSE, sticking two fingers up at the minority of customers who are still losing money owing to errors by the multi-million pound company.
EDF, British Gas and npower said they were “not aware” of any issues with their own meters
You know how it is when a service provider provides a bad service and you just wish you could fine them, or charge them for your wasted time trying to sort out their incompetence? Well that’s exactly what one man has done, after getting increasingly frustrated with Npower’s apparent inability to refund his credit balance after he switched supplier.
Dave Clark, was not only sick of not finding a cheque on his doormat every morning, but was also getting more and more peeved at receiving final demand letters from Npower, when it was they who owed him money since the previous November.
So he decided to respond in kind. He wrote and emailed npower using the language from their demands, culminating in the issue of a final demand (complete with obligatory red capital letters) which included a £50 fine on top of the £137.41 he had overpaid. And Npower not only paid it, they apologised.
Mr Clark, who outlined the whole sorry process on his website, said: “I’m satisfied. The regulator should be looking into the days and weeks it takes to pay someone’s money back and if the likes of Npower persistently refuse to give money back straight away they should be fined heavily.
“They’re very quick to bill the rest of us so perhaps if we all hit them with charges they would realise they need to improve service.”
Guy Esnouf, director of external communications at Npower said: “We are very sorry. Where we know we’ve caused inconvenience we’ll look to a goodwill gesture because we don’t want to cause our customers inconvenience.”
Mr Esnouf added: “We said in December we are having system problems. We are making good progress, but we made it clear we wanted to improve, we are trying to improve and we are.”
So surely now everyone else to whom Npower owe money can expect a nice windfall and better service…
They’d also failed to give some companies any notice that their contract was due to end, which meant that customers weren’t able to shop around for a better deal.
The arm of British Gas has already paid out around £1.3m to affected firms, but has a further £3.45m to pay into an energy efficiency fund, as well as a £800,000 penalty. If British Gas Business hadn’t co-operated with investigations, the fine would have been much more.
Ofgem found that the company had been pulling a fast one for five years, which seem to be down to a fault in their computer systems.
“The ability for consumers to switch easily and fairly is key to a well-functioning energy market,” said Sarah Harrison, Ofgem’s senior partner in charge of enforcement. ”In these cases British Gas Business failed these consumers who were wrongly blocked from switching, many of them small businesses, and denied others the chance to switch to a better deal at the end of their contract.”
The managing director of British Gas Business, Stephen Beynon, said: ”We’re sorry these errors occurred and have worked swiftly to change our computer systems and processes, putting controls in place to stop this happening again. We take any failure to meet our obligations very seriously and will ensure that the new energy efficiency fund we have set up will be a real help to hundreds of small businesses”
Energy companies are just taking the piss now aren’t they? Complaints about the UK’s energy firms have rocketed to the highest level on record in the first three months of 2014, going up by 224% according to the energy sector’s ombudsman.
Between January and March, there were 10,638 complaints. Compare that to the same period last year, where the figure was 3,277. Compare that to the small matter of there being 17,960 complaints in total in 2013, and it looks like we’re going to see record levels of gripes from customers. Crucially, are the energy companies going to even care?
The main concerns for customers is that they’re not receiving bills, angry about billing charges and unhappy with poor customer service.
This comes on the back of regulator Ofgem announcing that they would be referring the whole of the energy sector to the Competition and Markets Authority for an in-depth investigation.
The Chief Ombudsman Lewis Shand Smith said: “Consumer frustration and dissatisfaction is something that we hear about every day, and we welcome any attempts by Ofgem to make the energy market fairer.”
“With energy complaints trebling in the first quarter of this year and problems relating to billing the greatest concern, increased transparency is something that should be addressed.”
According to the company, Nest will learn how you use the heating in your home, thereby saving your energy and reducing your bills. Nest have other smart products as well. Last month, they released a fire alarm that knows the difference between you burning your toast to your sofa being ablaze.
Maybe Nest will kit out entire houses and have them voiced by Pierce Brosnan which will seduce you while you’re in the bath?
Nest has been selling well in the States, with 1 million of them flying off the shelves, with our American cousins apparently saving 20% on their heating bills. Of course, with our Big Six refusing to help us out with our bills, it looks like we’ll have to go elsewhere in a bid to get our outgoings down. However, the bad news in that respect is that Nest have partnered up with Npower, which means some of you will have trust issues.
Lionel Paillet, Nest’s general manager for Europe, said their gizmo isn’t like the other smart-thermostats: ”It’s comparing apples and oranges. The Nest thermostat is really learning, it knows your preferences, it helps you keep comfortable, not sacrificing your comfort for energy savings.”
“You don’t have to programme it – programmes are cumbersome and don’t really work. The more you use it, the more it learns,” added Paillet.
Nest is on sale today and will set you back £180 on its own, or, if you want it installed, £250.
British Gas has been accused of trying to put the frighteners on people, after gasbag Centrica boss Sam Laidlow warned that an investigation into the energy market may lead to power blackouts.
He claimed that potential investors will be put off from backing an updated energy infrastructure if Ofgem started shaking up the energy industry with its two-year investigation.
His reasoning is that the potential breaking up of the Big Six would create uncertainty and decrease investment in the energy market, leading to what he called a ‘substantial risk’ of outages and blackouts. Ooh, we’re so SCARED.
Obviously, this sounds like a lot of desperate, self-serving bollocks, and everyone in the world has come out to tell him so, including uSwitch, Ofgem, the Tories, the Lib Dems, energy secretary Ed Davey and the Shadow energy secretary Caroline Flint, who said:
‘Nobody will be fooled by scaremongering from the energy companies. What matters for investors is long-term certainty on returns, not short-term gains based on overcharging.’
So what’s Mr Laidlow got to hide, we wonder? Could it be that he doesn’t want his £2.2m a year wage packet taken away from him? I mean, what’s going to happen if he can’t afford to fill his hot tub with Dom Perignon any more?
Ofgem are, once again, going after the energy companies, saying that they’re making excess profits and pulling a fast one and ripping off customers. However, Ofgem haven’t troubled The Big Six much, so this time, they’re tagteaming with the Competition and Markets Authority who have been asked to launch a full investigation.
The aim is to threaten The Big Six with the fact that there’s a very real chance they could be broken up.
Ofgem pointed out that retail profits from the UK’s largest six energy suppliers had gone from £233m in 2009 to £1.1bn in 2012 “with no clear evidence of suppliers becoming more efficient in reducing their own costs”. They continued: “Further evidence would be required to determine whether firms have had the opportunity to earn excess profits.”
The regulator also found “new evidence that prices rise faster when costs rise than they reduce when costs fall” and that suppliers were “consistently setting higher prices for consumers who have not switched” and that there us evidence of ”possible tacit coordination reflected in the timing and size of price announcements”, which “reduces competition and worsens outcomes for consumers”.
Dermot Nolan, Ofgem chief executive, said: “Ofgem believes a referral offers the opportunity to once and for all clear the air and decide if there are any further barriers which are preventing competition from bearing down as hard as possible on prices.”
So what do the businesses think about it all? As ever, they’re firing threats back at everyone. Centrica warned that even by being investigated, it could result in blackouts because it would mean less investments in new power plants.
Ofgem aren’t phased: “Given these problems Ofgem believes a referral to the CMA is timely and necessary because CMA’s more extensive powers can address any long-term structural barriers to competition. A market investigation would conclusively determine whether vertical integration is in consumers’ interests or whether there should be more separation between the largest companies’ supply businesses and generation arms.”
Hands up if you think this is going to result in anything good for the customer.
SSE have announced that they’re going to freeze prices until (at least) 2016 and probably want some kind of medal for it. Naturally, this news will be met with a huge shrug because, if a company keeps whacking their prices up year-on-year, no-one is going to be thrilled when they announce that they won’t be putting them up for a bit.
So how are SSE doing this? Well, they’re trying to cut costs and one sure fire way of saving money is sacking a load of people. 500 people will be axed from the firm and SSE have said they’re not going to spend as much money on the building of offshore windfarms.
Chief executive of SSE, Alistair Phillips-Davies, said: “We’re responding to the questions that have been asked of us with a positive agenda for customers, including the longest ever unconditional energy price freeze. To help us achieve that, we’re making sure our own house is in order by streamlining and simplifying our business.”
Of course, SSE saying they’re responsible for the ‘longest ever price freeze’ goes to 2016, while EDF are currently offering a fixed price until March 2017.
“This provides peace of mind at a time when more than three quarters of people are expecting prices to go up next year, 2 and over 80% of people are worried about energy price rises in the next two years,” the company said.
If only the energy companies had been so kind during the recent recession years.
By 2020, your energy bill will look like a phone number. That’s the latest news from Which! who are predicting that energy companies will have to spend £118bn on updating ageing infrastructure between now and then.
And are the energy fat cats going to take that out of their sherry bill or are we going to pay for it? Well, what do YOU think?
Which! has written to the Treasury prior to next week’s budget with a stark warning that the upgrade to the UK’s energy infrastructure could make bills skyrocket – leaving households with an average of £2000 a year to pay. And that’s a conservative estimate. If energy prices go up, we might be looking at a whole lot more.
Consumer firebrand Richard Lloyd has his pilot light set to stun, and said:
‘I don’t think consumers know that this is heading their way and that decision has already been made by the Government. This is a massive chunk potentially on everyone’s bills. This means one thing: that household bills are set to rise, and to rise for many people very steeply for the foreseeable future.’
Which! are campaigning for a full investigation into energy pricing. Meanwhile, we consumers will be quaking in our boots when the budget is announced, praying that we don’t get shafted even further.
The energy companies may have simplified their energy tariffs, but Which!!! aren’t happy: they’re not simple enough! They think that consumers still don’t know their arses from their elbows when it comes to working out how to get the best deal.
The watchdog challenged some people to pick the cheapest electricity tariff from the Big Six companies, using the new tariff structure introduced by Ofgem. Of them, only 35% were able to pick the cheapest offering.
31% picked the wrong tariff and 34% didn’t think it was possible to work out what was going on. 41% felt the need to use tools to help their calculations and only half of them got it right.
Which!!! executive director Richard Lloyd said: “In spite of Ofgem’s tariff reforms to simplify the market, consumers are still failing to spot the cheapest deal because energy pricing remains too complicated.”
“More radical changes are needed to fix the broken energy market. That’s why our Fix the Big Six campaign is also calling for a full competition inquiry, so that hard-pressed consumers can be confident that the market works well for them as well as shareholders, and that the price they pay is fair.”
Is the real problem that energy bills are so tedious that no-one can actually be bothered to work them out?
Remember QR codes? Those funny looking squares that were supposed to be the Next Big Thing in technology but were really a bit crap? Never fear, always on the cutting edge of everything the UK Government has decided to force the issue of putting QR codes on energy bills, despite everyone else being decidedly meh about it.
In a statement, Energy Secretary Ed Davey said “We’re determined to make energy markets work better for consumers – and despite all the evidence showing that QR codes on bills would make a real difference to people, energy companies still haven’t done anything about it.”
The idea is that these QR codes will link through to tariff and usage information, allowing consumers to check and compare their bills more easily. There is even a suggestion that the data could be fed straight into comparison sites to allow consumers to switch more easily. And no doubt the selected comparison site will be very grateful for all that free customer data…
A previous feasibility study on this issue found that there were “no barriers” to the implementation of QR codes on customer energy bills and that the technology would in fact be “helpful in increasing consumer engagement.” However, there has been no voluntary move by the energy sector to introduce QR codes, presumably as they are looking towards smart meters and other new technologies, rather than something most of us no longer use (if we ever did.)
The Government has now opened a consultation under the Energy Act, which will run until April 21, which will look to modify the energy company licences to have QR codes compulsorily included as part of energy bills.
So what do you think? Is your energy bill just crying out for a randomly printed black-and-white square or is the compulsory implementation of such a system only going to increase energy companies’ costs (and therefore consumers’ bills) without actually offering anything of value?
Looks like energy companies are still the country’s worst offenders- on just about everything. This week, new research from uSwitch.com shows that energy providers are not just charging us an arm and a leg they are doing so incorrectly, with almost two in ten households (19%) being incorrectly billed by their energy company within the last two years.
With 19% of households incorrectly billed- and a total of 11% who have had this happen more than once, only HMRC is considered more inept at getting bills right, with Council Tax, mortgage companies and insurers all coming up roses over the last eight years of the survey. While customers who have been overcharged have been in the news recently, as the energy companies hold on to refundable cash, 39% of those surveyed, equivalent to 10.14 million people, were surprised with an unexpectedly large bill following a ‘bill adjustment’, with the average extra amount owed being £146. More than one in ten (14%) have unexpectedly ended up owing £200 – £400, while 7% have ended up owing over £400.
And when extra amounts are incorrect? It is taking even longer for energy companies to sort out the problem- the average time is now just under two months, up from one month a year ago.
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “Consumers are typically paying over £100 a month for gas and electric, so the fact that they cannot rely on the accuracy of their bills is simply unacceptable. With energy bills accounting for the largest chunk of household expenditure after rent and mortgage payments, billing blunders can leave consumers feeling frustrated, susceptible and out of pocket.”
The Big Six energy suppliers have been hounded for a while and they’ve reacted badly so far, threatening Britain with a blackout. Now, they’re going to be extra annoyed as they are going to have to disclose long-term power prices, twice daily, from next month, thanks to new rules from Ofgem.
If they don’t comply, they’ll be penalised.
“Almost two million customers are with independent suppliers and we expect these reforms to help these suppliers and any new entrants to grow,” Andrew Wright, Ofgem’s chief executive, said in a statement.
Energy minister, Ed Davey said British Gas might have to be broken up to put an end to excessive profit margins and Ofgem, the Office for Fair Trading and the Competition and Markets Authority have all been investigating the competition in Britain’s energy retail market.
“Ofgem continues to think there is an issue around liquidity and transparency in the wholesale energy market,” said Peter Atherton, utilities analyst at Liberum Capital. ”But whether (these rules) solve any of the problems is questionable.”
It’s a messy situation and it doesn’t look like anyone’s going to be getting cheaper bills any time soon.
As every frog with a hand up his back knows, while it isn’t easy being green, if there is a financial incentive to being more energy efficient, people are more likely to join in. But what happens when energy (and cost) saving claims are
made-up exaggerated not quite accurate?
The Energy Savings Trust has now turned it’s suspicious attention on manufacturers of white goods, claiming that 20% of products do not live up to their energy efficiency claims. This is in addition to an EU investigation that found one in five products were not compliant with energy standards, including items being incorrectly labelled as regards their energy efficiency.
As a result, the Energy Saving Trust will now be independently purchasing and testing energy-using products across Europe to verify the energy saving claims made by manufacturers. This is part of a product surveillance programme, known as MarketWatch, to make sure consumers are getting the best deal through fully compliant energy-using products that match their energy saving claims in real-life situations.
Over three years, the scheme will see over 300 inspections in shops and 300 in online stores, checking a total of 25,000 products to see if they are properly labelled. Additional laboratory tests will also be employed to verify the true energy efficiency of products against the performance claimed.
Philip Sellwood, chief executive at the Energy Saving Trust, said: “Consumers are wising up to the monetary savings of using the best and most efficient products – they’re trying to do the right thing but need to be rewarded properly through the savings stated being realised.”
“That’s why we aim to be the eyes and ears for UK consumers to ensure energy efficiency claims by product manufacturers are true and will save them money on their energy bills. We need to address the fact that consumers across Europe are not maximising the energy saving benefits stated by millions of products.”
Energy rating on white goods is big business, with the likes of Which! and John Lewis publishing details of the ‘true’ cost of buying a new appliance once energy running-cost savings are also imputed. Energy Saving Trust figures indicate that the UK alone could save nearly £1.3 billion a year on electricity bills by switching to more energy efficient products. This includes fridges, freezers, tumble dryers, washing machines and dishwashers. But only if the appliances achieve the energy savings stated on the tin.
Rick Haythornthwaite – the chairman of Centrica (who own British Gas) and possibly owner of a fictional surname – has said that the political debate over energy prices risks “the lights going out” in the whole of Britain and that blackouts were ”looming much larger” and no longer the “figment of a scaremonger’s imagination”.
What’s caused this jumpy warning? Well, for a kick off, Ed Miliband has said Labour plans to freeze energy prices if they win the 2015 election and energy secretary Ed Davey has suggested that Centrica should be broken up.
“I think the reputation of Britain as a place in which to invest is under threat and the time to correct that is now, not after the 2015 election, by which time the possibility of the lights going out in Britain will be looming much larger,” he said. “And I don’t see this as the figment of a scaremonger’s imagination. I think right now we’ve got to restart collaborative, constructive dialogue around these key issues; we cannot afford to wait, hostilities have got to cease.”
Sam Laidlaw, another bigwig at Centrica, added: “We firmly believe that any form of price control in a competitive market is not the answer and is not in the best interests of customers, and this has been clearly demonstrated by experience in other markets. Such proposals create both short-term uncertainty for all energy suppliers and longer-term additional costs for customers.”
Things are tough at British Gas. They’ve lost 462,000 customers since 2012, with a whopping 100,000 ditching them in the past two months. Profits are down and the company have been raising tariffs. All the energy companies, currently, look worse than bankers and trust is low.
However, with people like Laidlaw on £5million a year, it seems there’ll be little sympathy for political hostilities toward the energy sector, especially if it seems like they’re ready to switch the lights off in Britain, in a sulk.