Posts Tagged ‘energy’
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.
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.”
Energy firms are under the spotlight again. After being called out for making too much money last week, now the energy regulator Ofgem has issued a statement slapping the wrists of energy firms who are too quick to force prepay meters (PPMs) on customers struggling to pay, saying that energy should do “all they can to support customers” and to “protect” vulnerable customers who are in danger of self-disconnecting.
Of course, energy firms are always cast in a villainous light, but given the “increase in the number of PPMs installed for non-payment of debt”, Ofgem are now going to “investigate” why the numbers are rising. Ofgem have today stated, very clearly, that “installing pre-payment meters under warrant should be used as a last resort by energy suppliers when consumers get into debt. It is a way to prevent a customer from being disconnected. Suppliers can only install a prepayment meter where it is safe and reasonably practical for the consumer to use.”
It seems that Ofgem suspect that energy companies are not using PPMs as a way to help their customers out of a sticky situation, but are instead leaning on people in order to get their money faster. Ofgem have also said that energy firms might not currently be doing “all they can to support customers struggling to pay” and recommend that, before resorting to PPMs, firms should offer energy efficiency advice and signposting to social support, in line with Ofgem’s own commitment to work with Citizen’s Advice to help identify and protect vulnerable customers. They also want to see common sense applied when setting outstanding debt repayments on the meter, making sure these are at an affordable level “taking into consideration the customers’ financial circumstances.”
In addition, Ofgem note that some energy firms seem to be making it difficult for PPM customers to switch suppliers, even where switching would help customers who are struggling with bills. Ofgem want PPM switching to be easier and they are formalising energy suppliers’ current voluntary practice of allowing PPM customers with a debt of up to £500 per fuel to switch, by making it an obligation.
But of course, it’s easy for Ofgem to say these things and the energy companies to nod sagely and agree, without actually doing anything differently. However Ofgem is also going to require firms to evidence their practices and the actions they have taken to protect customers, particularly where there is additional ‘vulnerability’. For example, if customers are relying on energy for medical reasons, or have mobility problems that limit their ability to access the prepayment meter or top up the meter, the supplier will not be allowed to install a prepayment meter.
So what do you think? Should energy customers do more, or should customers take more responsibility for paying their own energy costs or face the punitive PPMs? Does it make a difference if we’re talking about a pensioner in a freezing cold home, or a working-age family?
It goes without saying that energy companies in the UK have been charging everyone a lot of money in their bills, and there’s a good chance they’ve been overcharging too. Legally, we leave the latter statement ambiguous, but you get where we’re coming from.
Ofgem, who are looking into all this, has referred the entire energy market to the Competition and Markets Authority, because there needs to be a formal investigation over the prices that everyone is paying. Are they artificially high?
Someone thinks so.
All eyes are on how much money is being made, and concerning SSE, they’ve seen profits shooting up by 40%, leaving everyone to wonder how they managed it. Of course, they’re not alone and data from Ofgem shows that (click here to see Ofgem’s lengthy report, complete with some graphs).
The Indy decided to crunch some of the numbers and statistics and came up with their own graph, which is more digestible.
Basically, the energy companies get £120 from your combined gas and electricity charges every year, which is up from 2009′s figure of £10. That’s a big ol’ jump. The problem is that The Big Six have lowered their prices, but no nearly as much as the drop in wholesale prices. If you look at gas, bills have fallen by a couple of percent, while the cost of the companies buying it has dropped by 20% – the savings are not being passed on.
An Ofgem spokesperson says: “Falls in wholesale energy prices have resulted in significantly better deals for consumers on fixed tariffs but the majority of consumers who are on standard variable tariffs do not appear to have benefited to the same extent. We look forward to seeing the CMA’s draft findings and recommendations in the coming weeks.”
That said, SSE won’t care because, despite losing half-a-million customers, they still managed to report a 39% increase in profits through their retail arm. After a number of price hikes, they pledged to freeze prices until next summer.
That’s if the government makes things easier for them.
The company said: “SSE would like to extend its price freeze again, or even cut prices if further costs can be taken out of energy supply, and will work with the new UK Government or indeed any stakeholder to find such solutions.”
While all this is going on, the Competition and Markets Authority is currently in the middle of an in-depth probe into the energy market, as there are suspicions that customers have been treated unfairly by the UK’s dominant big six energy suppliers. We’re expecting a lot of fines to be handed out in 2015/6.
As far as a UK energy company is concerned, Scottish Power has received the highest number of complaints EVER, according to new figures. They’ve seen complaints going up by a whopping 488%, according to Citizens Advice.
1,163 customers per 100,000 complained about Scottish Power in the last quarter of last year, which is the largest amount of people moaning in any one quarter. And what has caused all this? The reason is largely because of the supplier’s new billing system.
While complaints across the sector are going down, Scottish Power are reversing the trend and were banned from proactive sales in March after failing to meet customer service targets set by Ofgem, who had found that the company hadn’t made sufficient improvements regarding customer complaints.
Npower must be thrilled as they’re usually heading up the table for being the most complained about energy company. For the first two quarters of 2014, they were, but Scottish Power’s dreadfulness saw them taking the top spot in the second half of the year.
Citizens Advice chief executive Gillian Guy said: “New billing systems are routinely failing energy customers. In the last few years, four of the largest firms have introduced new billing systems, and their implementation has caused chaos for consumers. Thousands of customers have been hit by delayed and incorrect bills which have resulted in extreme frustration and significant debts.”
“It’s encouraging that Npower is now turning the corner, but Scottish Power still has a very long way to go.”
Neil Clitheroe, chief executive of Scottish Power retail and generation, said: “We apologise unreservedly to any customers who have experienced account issues. These statistics reflect service problems in the last six months of 2014, when we had our most challenging period following the introduction of a new £200 million customer IT system.”
“To make improvements we have added 700 new customer service advisers and we worked closely with Ofgem on call waiting times, outstanding bills and ombudsman complaints. We also agreed with Ofgem to stop outbound sales for a two week period. Recently our call answering times have been among the best in the industry and outstanding complaints have been reduced significantly. We remain fully committed to resolving outstanding issues and ensuring that no customers will be left out of pocket.”
The cheapest energy deals can’t be found on suppliers’ websites. Nor on comparison site tables. Despite falling energy prices, the best energy deals are actually being reserved for groupon-style collective switching deals. Power to the people.
Fixed energy tariffs are standing at a ten year low and have dropped below £900 a year –the cheapest deal on the market currently being £899 from GB Energy Supply for an average family usage. However, there are cheaper deals available by signing up to one of the growing number of collective switching programmes, where, a bit like price-drop TV, energy companies compete to offer the lowest tariff to a defined group of committed switchers.
An £876 tariff offer by the Telegraph (newpaper) has just sold out, snapped up by 8,000 people, and today, online comparison service uSwitch has offered a matching tariff with E.On which is available for group switchers until May 23.
The idea is, of course, that the energy companies benefit by instantly getting thousands of new customers without having to woo potential switchers with pricey advertising campaigns. And they’re still making money, as these cheapest deals are actually £419 cheaper than the average energy bill owing to the fact that three quarters of customers are on standard tariffs.
But how likely is it that the lowest collective tariffs are pinching at the profits of the energy giants anyway? Global crude oil prices are less than half what they were in mid-2014 prices, but energy bills are still flying relatively high, resulting in a Government investigation in January into why energy bills were not falling despite a drop in wholesale costs.
The “big six” energy firms claim they buy wholesale gas and oil months in advance, so absolutely totally cannot pass these savings on to consumers straightaway. And we all remember how they didn’t pass on any earlier increases in the wholesale costs as well…
There has been some movement, even in standard tariffs, with “token” price cuts that reduced annual bills by around £35 a year. However, research by our friends over at Which!!!, used hedging models to allow for such short- and long-term forward planning, and they think there is still scope for lower prices, suggesting that gas costs could drop by at least 8.8% and that a standard electricity tariff could fall by 10%
So if you’re looking to switch your energy bills, keep your eye out for a collective bandwagon upon which to jump, and if your fix is finishing soon, watch out for, possibly, even lower prices on the horizon.
Switching energy bills is supposed to be getting easier for consumers, so they can get the best deals, but it is clear that this isn’t the case as confusing tariffs and poorly presented billing information is stopping too many people from getting a package that is right for them.
So says a report by the CentreForum think-tank, compiled for comparethemarket.com. Of course, a lot of price comparison sites aren’t helping either, as they’ve been helping themselves, rather than you.
Despite Ofgem’s efforts, switching rates in the UK have been on the decline because the whole process is just too complicated. The report shows that the biggest problem for energy customers is the “deliberately confusing way that suppliers present information”.
Bills are presented in a way that is too complex and tariff descriptions were “buried in cryptic terminology, making like-for-like comparisons extremely difficult”.
The report invented a new word, saying that this ”confusopoly” is preventing fair and effective competition in the energy market, which of course, is leading everyone into being “ripped off”.
CentreForum think that Ofgem’s new Tariff Comparison Rate (TCR) should be given the chop or, at least, better communicated, because it could be “misinterpreted as an accurate comparison tool for all consumers” rather than the average customer. They’d also like to see a standardised Tariff Information Label, all put on one singular page, to allow people to make faster, better informed choices about their supplier.
The report’s author and associate director for economic policy at CentreForum, Tom Papworth, said: “The obfuscatory way that information is presented by energy companies acts as a significant barrier to switching supplier. Customers frequently complain about receiving too much information and having too much choice, rather than too little. Bills are complex and like-for-like comparisons difficult.”
“An overhaul of some of Ofgem’s Retail Market Review recommendations as we suggest would therefore clearly benefit consumers.”
Comparethemarket head of energy James Padmore said: “The report underlines the fact that the energy market is broken. Consumers struggle to make sense of energy bills and too many remain on uncompetitive tariffs because they are unsure of how to compare deals based on their current usage and expenditure.”
“We estimate that if everyone moved to the best energy tariff for them, the ‘energy dividend’ back into the pockets of UK consumers would be in the region of £4 billion – an indication of the overpayments caused by automatically rolling on to standard tariffs and not reviewing bills. Consumers need to be able to compare tariffs like for like and make informed decisions about the best deal for them. The report we have commissioned clearly shows that, at present, the energy industry falls woefully short of this requirement.”
This is the fourth largest payment made to Ofgem, who will be passing the money on to Citizens Advice. Eon have already coughed-up £400,000 to affected customers.
So what happened? Well, under Ofgem’s rules, suppliers have to give customers 30 days’ notice of price increases, so that they can switch to another provider before the rises come into play. Exit fees and higher tariffs should not be levied if consumers have said that they’re going to leave for another company.
These errors from Eon relate to their price hikes in January 2013 and January 2014. They’ve paid back an average of £8 and £12 to around 40,000 customers already, but that’s not good enough. Of course, Eon have already been fined £12m for violating sales rules.
Sarah Harrison, Ofgem’s senior partner in charge of enforcement, said it was “vital that suppliers play by the rules so customers are encouraged to engage in the market.”
“It is important that Eon has repaid potentially affected customers and co-operated with the investigation,” she added; “However, it’s absolutely unacceptable that Eon failed to provide these vital customer protections yet again and this persistent failure is the reason for the high penalty.”