The auction was capped for small suppliers, so Co-op’s Pioneer tariffs, both the new fixed and existing variable versions, will be offered to 30,000 people who signed up to the exercise on a first come first served basis. All participants will also be offered the best deal available on the open market, which could spark increased price competition over the next few weeks.
Should 30,000 people decide to switch to the Co-op, other participants will be offered EDF’s Blue+Price Promise tariff that Which? said equated to £1,056 a year for the average dual fuel household paying by direct debit. That compares to the Co-op’s new fixed offering of £1,048. Co-op’s variable rate is £1,144 and remains open to the general public.
Which? said five energy suppliers, Co-operative Energy, EDF Energy, E.ON, First Utility, and Scottish Power signed up to take part in the reverse auction, although Utility Week understands that at least one company, First Utility, did not actually put in a bid because it felt that the hedging risk required to hold a fixed price open over several weeks was too great for the margin involved.
Co-op Energy business development manager Nigel Mason said the firm was always planning to launch a fixed tariff, and decided to unveil it at the reverse auction. However, he admitted that it did cut across the single, simple product offering that has been the Co-op’s unique selling point to date. “That’s a fair comment, the simplest product range is a product range of one,” he told Utility Week.
Mason admitted it was “a dilemma” but one that was borne out by what registrants to the Big Switch wanted. Should the Co-op’s deals attract 30,000 participants, the firm will more than double its customer base. Mason said the fixed tariff was “unlikely to be a one off”, but could not say when the Co-op may offer customers a further fixed price deal in the future.
Which? said some 285,000 consumers signed up to take part. It will announce how many switched by the end of the summer. The organisation could not confirm whether all suppliers made a bid in the auction citing commercial confidentiality.