Engie to take on big six with new initiative
Customers to be moved on to its cheapest tariff
LEEDS-BASED POWER firm Engie is to take on the might of the big six suppliers with the launch of a new household energy service that promises to undercut its big rivals.
Engie hopes to appeal to customers by moving them onto its cheapest possible tariff once their fixed deal comes to an end, unlike rivals which switch people on to controversial “standard variable tariffs” (SVTs) which have been heavily criticised as they are so expensive.
The Tories have promised to cap these tariffs if they get back into power.
Engie said UK customers could save £3bn by switching to its service – around £175 per customer. Around 66 per cent of UK energy customers are on SVTs as they forget or can’t be bothered to switch supplier once their deal comes to an end.
Engie promises to get rid of the dreaded move to SVTs if customers don’t have time to shop around as they will be automatically moved to the cheapest possible rate.
Engie’s cheapest deal at the moment is a fixed product at £880. Price comparison website uSwitch said the average big six standard variable tariff, which most people are on, is £1,138 per year.
Engie, which powered the 2012 London Olympics, is a French utility firm that has set up its UK energy supply division in Leeds. Until now it has focused on supplying energy to SMEs.
The firm said it is the largest company to enter the UK domestic energy market for over 15 years.
Wilfrid Petrie, CEO of Engie in the UK, said: “We believe we have something new to bring to the market. We are not a well-known household name, but we are a large organisation. We have 20 million domestic customers.
“We don’t want to be one of the big seven. We don’t have any of the legacy issues the others have.”
Energy firms have been widely criticised for ripping off customers with their poor value SVTs and Prime Minister Theresa May has promised to bring in an energy price cap as a key part of the Tory manifesto.
Engie said it is the first UK supplier to commit to rolling customers on to the cheapest available tariff. The firm said it will contact all customers before their fixed term plan ends to tell them their options.
If the customer does not respond, they will automatically be moved on to a price equivalent to the cheapest available E ngie product, with no exit fees if they then decide to change their plan.
Engie’s business model is not based on making big profits from energy supply. Instead it hopes to make money via extra services such as smart thermostats and controlling your heating remotely.
Engie said the environment is central to its ethos and all of its plans offer 100 per cent renewable electricity at no extra cost.
Claire Osborne, energy expert at uSwitch.com, said: “Engie’s new deal at £879 a year is the second cheapest energy tariff available at the moment – and with 100 per cent renewable electricity as standard it will certainly prove an attractive offer for many consumers, not just the environmentallyconscious.”
We believe we have something new to bring to the market. Wilfrid Petrie, chief executive of Engie in the UK