Posts Tagged ‘energy’
Scottish Power have been slapped with a sales ban after they failed to meet Ofgem’s customer service targets. The energy provider was told to clear all their outstanding Energy Ombudsman decisions regarding customer complaints, but they didn’t.
They were asked to answer customers’ calls more quickly, reduce a backlog of bills and sort out outstanding ombudsman rulings. As such, the 12-day sales ban means the company can’t engage in “proactive sales” from today.
The energy company said that they are “committed to delivering the best service possible and treating our customers fairly”.
Sarah Harrison, Ofgem’s senior partner in charge of enforcement, said: “A sales ban illustrates the difficulties Scottish Power is having in delivering the levels of service customers deserve. While Ofgem’s targets have driven significant improvements in Scottish Power’s performance, we remain very concerned about how customers are being treated.”
Scottish Power say: ”We have successfully delivered two of the targets. In relation to the target of having zero ombudsman remedies over 28 days, we cleared 2,575 cases during November and, at 1 December, the Ombudsman confirmed that we have achieved the zero target.”
“However, subsequently it was identified that 30 cases had been closed incorrectly. We sincerely apologise to these customers for these errors. The cases were immediately fixed on discovery. In line with our original voluntary commitment and with the agreement of Ofgem, we will now stop outbound selling from 4 March until 15 March.”
Sometimes, businesses are so bad it is almost literally beyond belief, and smaller energy supplier Spark Energy has now been fined by Ofgem for falling squarely in that category. The crime? On top of sky-high charges and inaccurate billing systems, Spark Energy simply ignored customers’ requests to leave the supplier and just continued to bill them. Astounding.
An Ofgem investigation found that up to 29,000 households were left facing “eye-watering” inaccurately high bills and “staggeringly bad” customer service and that customers were “prevented” from leaving over a three year period between June 2010 and May 2013.
Many of Spark’s customers were tenants in rented accommodation who were signed up automatically by letting agents, and who then found themselves facing the highest pay-monthly tariff on the market. Ofgem’s £250,000 fine also took accounts of billing technologies that were “not reliable and generated inaccurate bills”, and yet, a bit like Hotel California, guests at Spark Energy could never leave.
Or could they. It gets even better as it appears some select few customers were permitted to escape Spark’s clutches- but only if they were a customer Spark didn’t want, and then they were switched against their will and without their knowledge. Ofgem documents suggest that only 705 customers were able to leave the supplier. These were customers in debt and between August 2011 and May 2013 Spark used switching websites itself and signed these customers up for different suppliers without their knowledge.
“Customers would not know the transfer had been completed or the identity of the new supplier until they received a welcome letter or email from the new supplier,” Ofgem said.
And if all that weren’t enough, Spark also failed to return cash to customers who were in credit in good time and didn’t deal with complaints properly. The company has agreed to pay £250,000 to Citizens Advice in lieu of a larger financial penalty after admitting to breaching a string of regulations.
Ofgem said: “From June 2010 to May 2013, Spark blanket objected to consumers switching their supply contract to another provider. As a result, consumers were unable to… choose a cheaper supplier (which would have been possible for pay monthly customers as Spark was the most expensive supplier during the period).”
“It is clear from the complaints evidence that some customers found their experience with Spark at the time extremely frustrating,” Ofgem finished in a totally obvious statement.
A spokesman for Spark Energy said, inadequately: “We welcome the manner in which Ofgem has dealt with these issues. We’ve learned valuable lessons from this process and recognise there were things we should have done differently, and we apologise for these failings.”
He went on: “However we’re pleased Ofgem has recognised the progress we’ve made over the past 21 months to transform our levels of customer service in this complex and difficult market.” We’re just surprised they have any customers left- unless they have all tried unsuccessfully to leave too…
The regulator is coming under fire from the Commons Energy and Climate Change Committee and, even though there’s been falls in bill prices and new price caps, MPs aren’t impressed.
The trouble is that new rules from the regulator aren’t tough enough and that those that manage the pipes and wires that dole out gas and electricity are still raking it in and not passing enough savings on to the customers.
Committee chairman Tim Yeo says: “Ofgem’s chief executive told us that we would have to wait eight years to see whether value for money was being delivered for bill payers. This is too long for hard-pressed consumers to wait. Ofgem must get its act together and scrutinise these near monopolies more effectively. Simpler charging methodologies are needed to strengthen the market’s ability to scrutinise costs and increase the pressure for greater cost-saving efficiencies.”
“Barriers preventing smaller players from entering the market must be removed to drive down costs for consumers.”
Energy companies pay network costs to use the aforementioned pipes and wires for distribution and transmission purposes and they are applied to bills. These costs amount to, roughly, 23% of a gas and electricity dual fuel bill. To sort this out, Ofgem introduced the RIIO system, designed to control network costs.
However, the committee have said that there’s ‘clear evidence’ that the network companies were coining it in far more than expected. The committee said that “this suggests that the targets and incentives set by Ofgem are too low, barriers to market entry are high and that Ofgem needs to monitor RIIO more effectively and to equip RIIO with stronger, corrective measures.”
“While we recognise that the new RIIO framework is an improvement on its predecessor, Ofgem has not yet created the conditions for the market to thrive and provide consumers with best value for money.”
So what’s the solution? Well, MPs would like to see a thorough study into replacing this system that is simpler and national, as the current one has a variety of regional charges and codes which make it more difficult to compare prices across networks. The committee would like Ofgem, and the Government, to start taking this seriously.
Of course, only last week, the Competition and Markets Authority said that they think we’re all being overcharged to the tune of £234 a year for our gas and electricity.
The owner of British Gas, Centrica, have said that they’ve had a big fall in profits thanks to nice weather and the drop in oil prices. Seeing as they stuck our bills up, seemingly needlessly for so long, it’d be funny if they expected anyone to feel sorry for them.
Centrica’s full-year operating profits fell by 35% to £1.75bn, which means that British Gas profits from residential business fell by 23% to £439m. Isn’t it awful when you’re still making a profit, but not as much as you normally do?.
Giving everyone the doe-eyes, Centrica said the price of oil and gas had forced them to write off £1.4bn from their balance sheet and that they were going to have to put off capital investment in the North Sea. They added: ”Other companies are doing the same thing. It’s difficult, but it is what we have to do to position the company sustainably.”
Oh, BOO HOO.
On Radio 4, Centrica honcho Iain Conn, said that “2014 was not the year we had planned it to be”, adding that his company continued “to face a number of challenges as we enter 2015, particularly the significant further reductions in wholesale oil and gas prices since the middle of December”.
Quick reminder. The company still have £1.75bn in profit, so when they’re complaining about people’s bills being £10 lower than they were 2014, like it’s our fault, don’t feel too bad. It seems, as a nation, we don’t, as for the last couple of years, British Gas have been losing a lot of customers, with 368,000 leaving them in 2014. The reason customers left? British Gas whacking everyone’s bills up.
So there you have it. British Gas’ owners want you to feel bad for them. If you want to kick them while they’re ‘down’, then here’s how to switch your energy account and get with a company that’s less emo.
A couple of days ago, we pointed out that there’s a lot of people losing money because The Big Six energy companies are ripping you off. Well, according to the Competition and Markets Authority, over 95% of households in the UK are indeed paying too much.
They’ve said that everyone could save £234 a year by switching their supply of gas and electricity.
As ever, the ones being hammered hardest are the poor and old, because they either think switching is impossible, or that it’ll be too difficult to do or they haven’t even considered it at all. With the Big Six charging the highest prices and not likely to help you out, then people are being stung via their ‘standard tariffs’.
The watchdog is going to continue to look into this in a bid to find out why people don’t shop around and whether or not the Big Sixers are actively trying to keep everyone “disengaged so as to retain them on high tariffs”.
The CMA are also looking at the possibility that the energy companies are ‘discriminating’ against loyal customers (or indeed, those disengaged) and weighing-up whether the businesses might “exploit and influence” the behaviour of their customers to their own advantage.
With more than 90% of UK households signed-up with the Big Six firms – British Gas, SSE, ScottishPower, E.On, EDF Energy and Npower – this is of course, a big problem. Many customers are with this shower after companies inherited them after the energy market was privatised over a decade ago.
How To Switch
If you want to switch accounts, then you can use an Ofgem-approved price comparison site. Find out about those by starting here. Before doing that, get in touch with your current supplier and ask for an ‘annual summary’, so you’ll have all the info you’ll need to get a better deal. You can also call the Energy Saving Advice Service on 0300 123 1234.
The Big Six energy companies are a pain in everyone’s backside, despite the fact they’ve lowered everyone’s bills by a small amount.
However, there’s more they could do, as it looks like somewhere in advance of 13 million homes are losing £200 per year because they’re on variable rate energy tariffs. That’s billions per year, when you tot it up.
With these deals, people are paying out more than they need to. If they switched to a fixed rate deal or changed to a smaller energy company, you could be saving as much as £250 per year.
These figures are coming to light as the inquiry by the Competition and Markets Authority (CMA) continues, due to be published soon. It won’t surprise a soul when we all find out that the Big Six are continually not passing on savings to their customers.
This estimate comes from the Department of Energy and Climate Change, which is being referred to as the £2.7billion rip-off. Today, they’re launching the ’Power to Switch’ campaign, in a bid to get people to move away from tariffs that are needlessly expensive.
Of course, one of the simplest ways of switching is to use a price comparison site (preferably one that has been approved by Ofgem) and you can be saving money with half a dozen clicks. Before you do that though, you’ll need your ’annual summary’, which you can request from your energy supplier.
That means, when you go to the comparison site, you’ll have all the correct information about things like annual usage, your tariff and all that, so it can work out which new deal would be best for you and highlight the amount you could be saving. Or, if you prefer, you can phone the Energy Saving Advice Service on 0300 123 1234. If you’re doing it online, then start here.
The five biggest price comparison websites in the energy market are being accused of all manner of things lately. One of the things being levelled at them is that they’re sending callers to energy tariffs that earn them commission when they’re not the cheapest deal at all.
Looks like, if you ring up and ask for the cheapest deal, there’s a chance that you’ll be sent to the cheapest energy deal that gets the comparison site a commission, rather than the actual deal that is best for you.
If we were Harry Hill, we’d do a sideways look to camera right about now.
Website The Big Deal has released recordings of phone conversations and transcripts from the last month, which they claim that the five biggest comparison sites – Confused.com, uSwitch, Go Compare, Compare the Market and MoneySuperMarket - conveniently failed to tell callers that some deals about the deals that don’t pay them a commission.
So, with uSwitch for example, the price difference between the cheapest tariff and the one that they claimed was the cheapest deal (according to The Big Deal) was £60. uSwitch aren’t amused and said: “We have very strict guidelines in place for our call centre advisers to follow and these include informing customers of the cheapest deal available, whether we can switch them to it or not.”
“We are investigating this matter fully and will take disciplinary action with any individual found to have breached these guidelines.”
The Big Deal co-founder Will Hodson said their findings show that comparison sites are “behaving as badly over the phone as they are online”, adding that those who will be ringing comparison companies will be people who aren’t fans of the internet, like old people or those who can’t afford an internet connection. Vulnerable people, basically.
Of course, this follows The Big Deals findings that comparison sites were pulling a fast one online too. Ofgem are also looking into it all and have banned comparison sites from automatically showing a partial view of deals from suppliers paying commission to them, instead, they’ve now got to start showing all available deals on the market.
MoneySuperMarket spokesman Stephen Murray said: “We completely deny the allegation that we lied to the customer. The telephone operator stated at the start that there were products available which she couldn’t switch the customer to. However, having reviewed this call, in this instance we feel we could have made that clearer. We are reviewing what we say to customers to ensure this is always crystal clear in future.”
Compare the Market.com’s spokesmeerkat said: “This mystery shopping exercise merely demonstrates that price comparison websites provide a valuable and transparent service to consumers.”
“The shopper was shown the whole of market when he searched for tariffs online. When he then decided to call our customer helpline to switch through an adviser, it was made very clear that his current tariff was being compared to a wide range of tariffs currently available through comparethemarket.com. Therefore, all quotes he was given over the phone were tariffs available to him through comparethemarket.com rather than the whole of market.”
“This process is clear and easy to use. We refute all claims that we misled the caller or offered an uncompetitive tariff.”
Energy companies may well have dropped everyone’s bills, but they’re going to be making a profit thanks to lower wholesale gas prices. Basically, because they’ve not lowered our bills by as much as they’re saving on wholesale costs, their pre-tax profits over the next year will be up by around 50%, which is £114 profit per household.
Those figures come from energy regulator Ofgem, who are putting pressure on the Big Six to lower our bills even further. Not enough pressure to make them actually do it mind you. They’re basically nagging in the hope it’ll work in our favour.
“Pre-tax margins of a typical supplier are likely to widen over the next 12 months as wholesale costs continue to fall sharply even when accounting for recent price cut announcements,” they said. ”If the market were more competitive you would expect suppliers to be competing more vigorously for market share in response to falling wholesale costs.”
As previously reported on these pages, Big Six companies have announced their price drops, which land between 1.3% and 5.1% and, crunching the numbers, every knows that the energy providers could’ve offered much better deals for their customers.
Gillian Guy, chief executive of Citizens Advice, said: “The inadequacy of recent energy price cuts is now clear. Low wholesale costs are allowing energy companies to increase profits whilst barely cutting energy prices. The ball is now back in the energy firms’ court to actually compete with each other on further and deeper price cuts.”
The Treasury are already investigating the energy sector, to see whether or not the Big Six are actually passing on savings, which they’re clearly not. While one sector gives us small savings, another launches expensive investigations to state the bloody obvious with our taxes.
The company – one of the most complained about energy solution providers out there – have pushed the boat out and knocking a whopping 1.3% off.
That works out at approximately £9 a year, or 17p a week, based on the average gas users usage. Hardly worth bothering with, really. It’s almost as if they’re daring the customers to flee.
According to MoneySuperMarket’s Stephen Murray: “This is truly the most underwhelming of the lot. On top of that, we see that bill payers will again not feel the full benefit of lower bills immediately.”
The company defended their measly 1.3% price reduction claiming that the vast majority of gas EDF bought for its customers was purchased well in advance and at higher prices.
Beatrice Bigois, managing director of customers at EDF, said: “EDF Energy has a strong track record of acting independently in the interests of customers who have benefited from the best standard variable prices for the majority of the last three years, in comparison to other major suppliers. Today’s price cut means our standard tariffs will continue to be among the most competitive in the market. At the same time, one and a half million customers are benefiting from fixed price deals with no exit fees.”
On Monday SSE said it would lower gas prices by 4.1% but not until 30 April. On Friday, Npower announced it would reduce household gas prices by 5.1% from 16 February. They’re still somewhat higher than 1.3 bleedin’ %.
Anyway, EDF’s wondrous gesture kicks in from 11th February.
The company become the fifth of ‘The Big Six’ energy firms to have announced a reduction in their price cuts, following recent moves by the likes of E.On, British Gas, Scottish Power and Npower.
Now they’re all staring at EDF to follow suit.
SSE will cut domestic gas prices by 4.1% from 30th April, which should save their average households around £28 a year. Whoop. They’ll be mindful that they’ve got to win people over after it was revealed that Ofgem are investigating them.
SSE – who have around 8.7 million customers – have also said it would extend its guarantee not to increase its gas and electricity prices until July 2016, and that wholesale energy costs now make up “less than half of the typical household energy bill”.
Steve Forbes, SSE’s director of GB Domestic, said: “We were the only supplier to freeze prices and we promised we would cut them if we could; now we’re delivering on that promise with an average £28 reduction in gas bills.”
“There are significant other costs within energy bills, including those relating to government-sponsored environmental and social policies and the roll-out of smart meters.”
Chipping in, Alistair Phillips-Davies, SSE’s chief executive, said: “Customers are at the heart of SSE’s business, and our work to secure their energy supplies in wholesale markets last spring enabled us to guarantee that prices would not increase until at least January 2016, showing we are committed to treating all of our customers fairly and to giving them stable prices over the long-term.”
“We’re being true to that commitment with a 4.1% reduction in the typical gas bill and an extended guarantee meaning gas and electricity prices won’t go up before July 2016 at the earliest.
SSE reckon the prolonged period of mild weather to 31 December 2014 meant that average consumption of electricity was estimated to have fallen by 5.6% while average consumption of gas dropped by almost 16%.
This ongoing set of price tumbles is responding to politicians and general “stop charging so much” level headed humans as well as due to the reduction in oil and gas prices. For that reason, the energy industry is undergoing a full scale inquiry from the Competition and Markets Authority (CMA) into the way it operates. The CMA inquiry is expected to report its provisional findings in May or June.
A number of energy companies are reducing their prices, and now Npower, after everyone told them that their customer service was beyond woeful, is going to cut their standard gas tariff in the UK by an average of 5.1% from 16th February.
In plain language, you’re going to save around £35 a year if you’re one of their customers.
Thus far, this is the biggest cut announced by a supplier after wholesale prices fell by 20%, which also saw E.On and Scottish Power dropping your bills.
After steady price hikes for years, all of these companies could’ve dropped their prices by greater amounts, but we’ll all have to take what we can get from this absolute shower.
“If there are further falls in wholesale prices, we will keep these under review to see if we can cut further,” prattled Npower chief executive Paul Massara.
Of course you will Npower. We’ve got every faith in you to do the right thing for customers. Either way,
The energy company have been annoying everyone with major, major problems with their billing and came bottom the Which!!! customer satisfaction survey for the fourth year running. They’ve got an overall satisfaction score of a meagre 35%.
They’re past caring these days aren’t they? It is almost like complaining about them is just white noise to them and they’ve started to enjoy it and are now trolling everyone.
ScottishPower wasn’t too far behind, again, haunted by billing cock-ups, and was second worst with a score of 41%. Both companies are under investigation by Ofgem for their abject performance, being threatened with sales bans unless they get through their complaints backlogs. Not that they seem to care one jot as The Big Six are completely oblivious to… well… everything.
Roger Hattam, Npower’s director for its domestic retail business, said: “We’re disappointed with the results. We value all feedback and have already made significant improvements to how we look after our customers.” Meanwhile, a ScottishPower spokesperson said: “Last year all our customer accounts were migrated on to a new £200 million customer service IT system, and although this will deliver real benefits in the long-term, the installation process has been challenging. The vast majority of accounts have been transferred successfully, but unfortunately the installation of the new systems has meant we have not been able to provide the level of service our customers expect.”
Both of those statements came from a press release generator by the sounds of it.
So who came top of the pile? Green energy supplier Ecotricity had an approval rating of 85%, which is great for them.
Year on year, the Big Six are performing poorly and getting their arses handed to them by smaller companies – is it time we all started moving away to the underdogs? At least the smaller companies don’t wait for the results of competition inquiries and surveys to start aiming for good service.
The watchdog are going to be looking at the way housing developments and other sites who have not yet been connected to the grid choose where they get their power from. It looks like, although far from confirmed, that someone’s been up to no good.
Ofgem wants to increase competition in this particular market but had found evidence that SSE breached competition law, so they want to look into the whether or not the energy firm put their rivals at a disadvantage.
This follows a separate announcement from the regulator, who published new rules for price comparison websites who must now meet tighter standards on how they relay their tariffs. These new rules come under the woolly name of ‘the confidence code’ and has been put together to ensure customers can trust that deals aren’t being hidden by price comparison sites.
Ofgem said that, from now on, sites are going to have to show the companies with who they have commission arrangements with, in a prominent fashion. They’ll also have to make it clear that they earn commission on certain tariffs.
Comparison sites have to meet these rules by the end of March or they’ll be in all manner of trouble.
As well as that, as we mentioned yesterday, Ofgem will continue to keep an eye on the Big Six energy suppliers to make sure they’re not ripping everyone off. The regulator wants to improve competitiveness, so we could be seeing more prominence from smaller suppliers with potentially better deals in 2015.
Maxine Frerk, Ofgem’s senior partner for distribution, said: “We are requiring electricity network companies to work quickly to resolve the issues identified in the connections market, to reduce the hassle of getting connected to the grid and help lower costs for customers. We are determined to ensure this part of the energy market works in customers’ interest and will use the full range of our powers to do so.”
SSE said: “SSE acknowledges Ofgem’s announcement of an investigation into its distribution business’s provision of electricity connections services in central southern England. SSE will co-operate fully with the investigating authorities and will not make any further comment until the investigation is completed.”
British Gas have graciously announced that they’re going to cut household gas prices by 5% as of next month. Now, of course, if they hadn’t been wildly putting everyone’s bills up for years, everyone would be happy, but forgive us all if we don’t take to the street, cheering.
The Centrica owned energy dispenser said that this will benefit 6.8 million customers, and in real money, will reduce the average yearly bill by £37.
The cut will apply from 27th February has come about because of a fall in wholesale gas prices and British Gas said that they will be keeping prices under review “for further movements up or down”. Don’t hold your breath, basically.
Naturally, this announcement from British Gas comes after E.On dropped their prices. With increased pressure from all sides of the political spectrum toward Big Six pricing, there may be more, especially with the threat of new powers being proposed to allow Ofgem to kick energy companies into shape.
With two companies dropping their prices, that still means there’s four to go who need to pass on the saving to their customers. They have some leeway too, because the fall in wholesale costs is around 20%, which means that the savings made with E.On and British Gas are relatively small, so some new customers could be won over if a rival passing on greater savings.
No sooner had we said that energy companies wouldn’t be cutting their prices, along come E.On to make us look like damned fools.
E.On is the first of the Big Six who have cut their prices, thanks to falling wholesale costs. They’ve said that there’ll be a 3.5% reduction in their standard gas tariff. That’s expected to save around 2 million households £24 on a typical annual bill. It isn’t much, but it is better than a punt in the gusset.
The good thing here, is that E.On’s actions will put pressure on the competition, which means the other five companies in the Big Six will have to look at following suit now that wholesale gas prices are 27% lower in 2015 than they were last year.
Of course, last week the Treasury said that they’d be investigating energy companies to find out why prices had not fallen despite the lower wholesale costs. The government should’ve been looking into energy prices years ago, but obviously, now there’s an election coming up, they’ve decided they care.
There’s also going to be a Commons vote this week which will look at giving Ofgem new powers to force energy companies hands when it comes to how much they charge customers.
Given the size of the drop in wholesale prices, E.On’s price drop is rather underwhelming, but for now, it is better than nothing.