Turning off the Big Six
ATTEMPTS to encourage households to dump the overcharging Big Six energy suppliers in favour of lesserknown rivals have hit a snag, as a string of smaller competitors have gone bust.
Last week, gas and electricity supplier Economy Energy became the latest to go under, after energy watchdog Ofgem banned it from taking on new customers because of failures in managing bills and account balances. Its 235,000 customers do not need to panic as their energy supply is secure, but the latest failure is likely to knock confidence in smaller firms. So is it still worth expending the energy shopping around?
UNHAPPY NEW YEAR
This is starting to look like the winter of discontent for smaller providers and there could be more to come, said Peter Earl, head of energy at CompareTheMarket.com: “Another month comes and another poorly financed energy company collapses.”
He said sharp rises in wholesale gas and electricity prices are hurting suppliers who failed to hedge properly against rising prices. Economy Energy joins a lengthening list of failures, including One Select in December, Spark Energy and Extra Energy in November, and Usio Energy in October.
In total, 11 suppliers have exited the market since 2016, although there are still around 70 to choose from. Earl called on energy regulator Ofgem to stem the flow of collapses by stress-testing every company switching to a lesser-known company if it has the right deal for you: “Well-run challenger brands provide cheaper tariffs and better customer service, not to mention other popular choices, such as green energy and easy account management.”
Every year, uSwitch runs an annual survey that shows what consumers think of their supplier and newer, smaller energy companies sweep the board for customer satisfaction, he added. In 2018, Octopus Energy was most popular with 96 per cent customer satisfaction, followed by Bulb Energy, The Utility Warehouse, OVO Energy, First Utility and Utilita. The Big Six languished, with Npower coming bottom as just 65 per cent of its customers were satisfied, followed by British Gas, E.On,
EDF Energy, SSE and ScottishPower.
SECURE SUPPLY
Gillian Guy, chief executive of Citizens Advice, the official consumer champion for energy, said Ofgem should make the process in moving over to the appointed supplier as smooth and hassle-free as possible.
Economy Energy customers should take up-to-date meter readings and wait for their new supplier to contact them. “They should avoid switching at the moment, as they risk losing any refunds they may be due,” she added. Prepay customers should be able to top up as normal and any outstanding credit balances will be protected.
Guy said there have been too many failures and Ofgem’s moves to tighten up licensing rules should address the problem of unprepared companies entering the market: “The continued failure of suppliers shows there are firms operating that require the regulator’s urgent attention.”
Affected customers can find advice on Ofgem.gov.uk and at CitizensAdvice.org.uk or on 03454 04 05 06.