Viewpoint: Alex Neil, managing director, home and legal services, Which?

Energy companies have yet to engage with people stuck on expensive standard tariffs.

Alex Neil, managing director, home and legal services, Which? Alex Neil, managing director, home and legal services, Which?

Energy is a perennial issue for both households and government and it was a turbulent year for the industry in 2016. From kicking off the smart meter rollout to Hinkley Point C gaining approval and the CMA’s long-awaited two-year investigation finally coming to an end, it has been an eventful 12 months. But the energy industry has not yet risen to the challenge of fixing what is now commonly referred to as “the broken energy market”. Customers, quite rightly, will be questioning what has changed this winter.

Since the CMA reported on it is findings this summer, we’ve repeatedly been told that consumers could be saving a significant amount of money a year by switching to the cheapest dual fuel deal available. However, while switching levels are increasing, they still remain woefully low.

Ofgem has been tasked with testing and trialling a number of remedies with energy companies to increase competition and reach those least engaged in the market. While there have been concerns about whether these reforms will transform the market, we want to see whether these remedies will deliver for consumers. In the meantime, the industry must not drag its feet. It should take the lead in making changes that can have an immediate impact.

Following the CMA’s investigation, the energy industry has stayed at the forefront of the media. Hinkley Point C gained approval and is set to go ahead. We now want to see it being delivered effectively and transparently, and for the government to assure people that costs will not be allowed to spiral out of control.

Similarly, with the smart meter rollout being delayed again in the lead-up to its 2020 deadline and with savings now smaller than suggested, the government must ensure that consumers really will get value for money from the rollout.

More recently, with the collapse of GB Energy there is speculation that other small suppliers could suffer the same fate as wholesale prices rise. Ofgem has handled the collapse well and must ensure that consumers continue to be protected if other suppliers go to the wall.

Moving into the new year, the CMA said customers are still collectively overpaying by a staggering £1.4 billion a year. This winter we’ve called on all energy companies to find new ways of getting customers stuck on poor value deals to move. Our “Fair Energy Prices” campaign is challenging energy companies to publish plans by 31 January detailing how they will engage standard tariff customers and take immediate action this winter to deliver against this plan.

To date, we’ve had no response. While some companies have taken a step in the right direction by freezing their standard tariffs, this is not enough. A temporary freeze for the winter will not help customers in the long term.

Let’s hope that 2017 will be a year of change for consumers, particularly those spending over the odds on energy. If energy companies continue to fail to engage with customers, they will have no-one to blame but themselves if the government and the regulator intervene.

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