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.
Sometimes bureaucracy is annoying; sometimes it’s plain silly and sometimes it’s downright ridiculous. Despite generally encouraging energy efficiency and green measures, a new VAT ruling from the European Court of Justice will mean that UK householders will have to spend 15% more on energy-saving home improvements.
Government and tax officials have, perhaps unusually, joined with green campaigners to oppose the ruling from Brussels that could add £1,500 to a set of rooftop solar panels and £70 to cavity wall insulation in a semi-detached house. The problem the EU have with the measures is to do with VAT.
Currently, energy saving expenditure on things like insulation and a new boiler, as well as on renewable devices like solar panels and wind turbines, qualifies for reduced VAT rates of 5%, just a quarter of the standard 20% rate of VAT. However, the ECJ has ruled that Britain’s favourable tax treatement on energy-saving materials breaks EU law, even though the policy was introduced in 2000 to help meet EU targets to eliminate energy waste by 2020.
In its binding (ie compulsory) decision, the European court said that reduced rates of VAT are only allowed on energy-saving materials installed in social houses or if it forms “part of a social policy.” The court rejected appeals from Britain that reducing the cost of energy-saving materials is socially beneficial and should therefore qualify. It also seems to contradict binding EU rules that oblige member states to “adopt policies which encourage…using efficient heating and cooling systems.”
“In these straitened economic times additional costs really could make the difference between installing and not installing,” Jenny Holland, of the Association for the Conservation of Energy, which represents the energy conservation industry told the Telegraph. “It’s completely illogical with the general thrust of EU policy making.”
It will cost £116 extra to insulate a semi-detached house with cavity wall insulation and radiator valves under the higher rates, which costs £808 today but would increase to £923, according to the Association’s calculations.
Treasury and HMRC officials are now working with the industry and campaigners to see whether they can find an alternative route, or a loophole to circumvent the decision, as otherwise the higher rate of VAT will come into force next year. No one who has pre-ordered or prepaid for these items will be affected, an HMRC spokesperson said.
It’s only taken just over a year, but the Competition and Markets Authority (CMA) has today published the preliminary findings of its investigation into the energy market and has concluded, as a huge surprise to no-one, that the big six energy suppliers “overcharged” millions of energy customers to the tune of £1.2bn a year.
The investigation got underway in June last year and the report refers specifically to the energy prices between 2009 and 2013. The CMA reckon that the big six energy firms reportedly charged households 5% more than they would have done in a competitive market. The big six are British Gas, E-On, Npower, EDF Energy, Scottish Power and SSE.
Over the past ten years, the CMA have calculated that gas and electricity prices have risen by 125% and 75% respectively; however they also believe that much of the increase in recent years has been down to environmental and network costs rather than actual price rises of the energy supplies themselves.
Despite having concluded that dual fuel customers could save an average of £160 a year by switching, the CMA do not think that the recent reforms by the energy regulator Ofgem to encourage switching – principally by reducing the number of tariffs on offer to reduce consumer confusion – have had the desired effect. The CMA are therefore proposing certain measures to protect customers from the evil energy giants. These measures include introducing a transitional price cap, while reforms are made to the energy market, and ensuring prepay meter customers- who currently pay even more through the nose than the rest of us- are the first to get smart meters in the scheduled national roll out. The CMA also want to see the end of automatically rolling-over energy contracts.
The investigation, which involved around a dozen site visits, 30 hearings and more than 100 submissions, will now continue with the CMA seeking to consult on these proposals and “remedies” and publish final recommendations before the end of the year.
It’s one of those things that savvy people do- you buy your gas and electricity from the same supplier to get the dual fuel discount because it would be silly not to, especially when said discount is advertised as being £50, £70 or even £100 per year. That’s a lot of lightbulbs. However, new research from Which!!! suggests that actually, buying your gas and electricity from the same supplier might not be the cheapest way to do it.
While we are all sold by the promise of huge cash discounts, quite often in life it doesn’t pay to get tied products if you don’t have to- home insurance as a condition of your mortgage being a great example- and it seems buying energy might follow a similar pattern. Which!!! found that the best deals for gas and electricity on their own were actually with smaller specialist suppliers, and by choosing the best individual deals, you could actually beat the dual-fuel-discount inclusive price of the more mainstream suppliers.
Which!!! reckon that small suppliers, like Daligas and Zog Energy, are often the cheapest for just gas, while electricity suppliers iSupplyEnergy and GB Energy Supply are the most competitive for electricity single supply. By using the best available tariffs, using prices from enrgylinx, Which!!! calculate your total energy costs for a year would be £849 a year, getting gas from Daligas (Daligas One FIX 12 paperless) and your electricity from GB Energy Supply (Premium Energy Saver). The cheapest dual fuel deal available, after deducting any dual fuel discount, comes in at £870, followed by the next cheapest at £913. This means that buying both fuels from the same supplier is actually costing you at least £20-60 more than choosing the best single fuel tariffs.
Of course, depending on how you are with bills, you might decide that the hassle factor of dealing with two suppliers instead of one is worth £20 to you. Also, if you are a switcher, the additional cashback you might get through sites like Quidco or Topcashback might be more than £20 more valuable to you, meaning a dual fuel switch might actually work out better for you. The point is to always assume the headline discount is not necessarily the best deal until proven otherwise. Energy companies are never considered the most trustworthy of brands, so why believe their discounts are the best without investigating it yourself?
It has been reported that 400 or so staff at British Gas and EDF Energy have been given body armour in case someone attacks them. Of course, no-one should be in fear of getting stabbed for simply doing their job, but then, even this hasn’t seen the powers that be thinking that there might be a problem with how much they’re charging: they see issuing stab vests as a solution, rather than making their products affordable.
The vests are being given to staff tasked with investigating energy theft, or those who have to fit homes with pre-payment meters to sort out customers who are in debt.
“Electricity and gas theft is a serious crime which puts lives at risk and adds unnecessary costs to customers’ bills. Because of the nature of the work our energy theft teams do, we’ve made protective clothing available to them,” said a spokesperson for British Gas.
A spokesman for EDF Energy added: “Our staff are issued with stab vests when carrying out debt-related customer visits or visits where the meter has been tampered with.”
Obviously, attacks are rare, and most customers vent their anger in the traditional way – shouting down the phone and the like – but really, this is a bleak indictment of the state of the energy market in the UK.
Around 500 jobs are at risk, after E.ON decided to close the Killingholme power station in North Lincolnshire. And yes, there’s a place called Killing Home. We hope there’s a village nearby called Murder Bed or something.
Anyway, back to the serious business. E.ON have said that market conditions for both gas and coal-fired electricity generation were “very challenging” and that they are too big to overcome.
The power station at Killingholme had previously been mothballed, but it ended up being returned to service in 2005.
Tony Cocker, chief executive of E.ON UK, said: “My main priority is our colleagues at Killingholme and we will continue to do all we can to help them through this difficult and uncertain time.”
“I would also like to thank everyone who has made a contribution to Killingholme throughout its lifetime – from the time the power station was a plan on a drawing board through to the team that will continue at the site in the months ahead to ensure it remains safe and secure. Ultimately, the decision to close the power station is not one we have taken lightly and, as our actions have shown, we have exhausted every possible option to try to keep the plant viable.”
“The reality, however, is that market conditions for both gas-fired electricity generation and coal-fired are very challenging and in this particular case too big to overcome which has resulted in 900MW of generation capacity being permanently removed from the UK’s power network.”
The unions aren’t best pleased, with GMB’s Phil Whitehurst saying: “This is bad news for at least 500 workers and their families in the supply chain who operate, service and maintain what is a viable combined cycle gas turbine station that has years of life left in it.”
“New low carbon generating capacity is needed but we are watching a funding crisis develop around building new power stations in the UK. We need a long-term plan for energy in UK. Leaving it to the market won’t work.”
We’re all always hearing about the big bad big six energy companies, and all the hundreds of thousands of complaints they receive every year from dissatisfied customers. However, what comparisons of straight complaint numbers does not factor in is the fact that the big six have many more customers than the smaller energy firms. Now, for the first time, the ombudsman has published the first set of quarterly figures ranking the number of accepted complaints for the 10 largest energy companies in the UK per 100,000 customers. And the results are interesting.
The data is published in the form of one-page summaries of complaints data by energy company, and when the details are compiled into a table, some of the placings might come as a surprise. The full top (or bottom) ten is as follows:
However, the fact that serial offender Scottish Power has the unhappiest customers is unlikely to be startling, dwarfing the rest of the table with its massive 173.02 complaints per 100,000 between January and March 2015. However, fellow big sixer SSE has actually had the fewest complaints referred to and accepted by the ombudsman, at just 4.16 per 100,000 customers, upheld in the same quarter.
Similarly, the smaller energy companies are perceived as more customer friendly, yet First Utility comes in third for most complaints, at 39.4 per 100,000, followed by Co-operative Energy and Ovo on 19.56 and 14.46 complaints respectively, making them less effective at keeping customers happy than three of the Big Six, Eon, EDF and British Gas.
Chief Ombudsman, Lewis Shand Smith, commented: “The publishing of this data for the first time puts consumers in complete control of their energy provision, giving them greater transparency about the complaints that we receive about energy companies… For the first time this means we can publish not only the numbers of complaints, but also by company name. Energy companies have already made great strides to better inform consumers and this will help ensure consumer grievances are addressed quickly.”
Which? executive director, Richard Lloyd, also commented on the table, saying “Our research shows energy companies are among the worst for resolving complaints, so suppliers need to start turning this round to improve on the low levels of trust in the industry.”
We’re used to energy companies being villainous in their dealings with poor, cold consumers, but what is more grating is when self-proclaimed consumer champions are found out to be dodgy dealing as well. Two price comparison sites found themselves hit where it hurts (in the share price) over concerns surrounding an Ofgem investigation.
This week, price comparison website MoneySupermarket.com admitted it had been asked to provide information to the energy regulator to help establish whether to include it as part of an ongoing enquiry. Ofgem had previously announced that it was investigating whether two or more companies that providing a “supporting service” for the energy industry were in breach of competition law. In simple terms, Ofgem suspect the price comparison sites were price-fixing with each other. Which is not normally something a bona-fide consumer champion would do.
The investigation could take “a number of months” and if found guilty, the companies could be fined “up to 10% of prior-year group revenue,” according to analysts at UBS bank. Moneysupermarket.com’s stock dropped by almost 10% at the news, and Zoopla, who own uSwitch,who are also ‘helping Ofgem with their enquiries’ also suffered a further 5% fall in their share price,despite news of their investigation on the issue having already leaked out.
Ofgem are reportedly keen to downplay the involvement of the comparison sites, whose income derives almost wholly from advertising on their sites and commissions paid on switches, as they don’t want to put consumers off using them. While comparison sites are, in principle, a good thing for consumers, and Ofgem is keen to get people checking the competitiveness of their bills, savvy consumers will always remember that in a market-driven company there has to be something in it for the comparison makers. After all, they are not, shackle-free consumer champions in reality, but listed companies with shareholders looking for a return to answer to…
It has been reported that nearly 4 million households in the UK owe £507m to energy firms, between themselves. That’s up 9% on last year, which shows that energy firms aren’t doing enough, despite dropping bills, which were too high in the first instance.
In a survey conducted by uSwitch, they discovered that the number of homes that had fallen in energy debt had grown by 260,000. 30% said that they actually owed their energy company more than they did than a year ago, which is pretty grim news.
The average debt per household is £130, even though over half (54%) of consumers saying that they’d been rationing their energy use in a bid to keep bills down. Considering that the average temperature over winter was the warmest in years, it shows that the current tariffs aren’t working.
One of the problems is that energy bills are still confusing everyone, with customers still struggling to switch accounts (we’ve got advice on how to switch). The new energy and climate change Secretary Amber Rudd has written to suppliers asking for further cuts, and of course, the energy sector is looking at a competition inquiry.
uSwitch director of consumer policy, Ann Robinson said: “Not only are more households in the red to their energy supplier, but the amount they owe has gone up, despite the recent price cuts. Energy suppliers must urgently pass on double-digit reductions to their customers – many of whom have admitted to going cold this winter in an attempt to keep their bills down.”