Offering competitive energy tariffs to customers would not be in their best interests at the moment, the managing director of EDF’s retail arm has told Utility Week.
Philippe Commaret was speaking following recent predictions by industry analysts that falling wholesale prices could soon see suppliers offering tariffs below the government’s Energy Price Guarantee, which is expected to increase to £3,000 in April.
Experts at Cornwall Insight have said that competition could resume “within a matter of weeks”.
However, when asked whether EDF was ready to resume offering competitive tariffs, Commaret said it was a question of whether it would be in the interests of customers to do so.
Instead he suggested that it would be better to wait for wholesale market prices to decrease before offering fixed tariffs.
He added: “If I can secure my customers with fixed priced offers, it’s much better for me, rather than to have the uncertainty with the standard variable tariff.
“But that’s not what we are minded to do because we do not believe that it’s in the interest of customers. The interest of customers is to benefit from the wholesale market prices going down.”
Commaret was further asked about the impact of bad debt following all suppliers pausing their prepayment meter (PPM) warrant activity in the wake of the shocking allegations by The Times against British Gas.
While EDF has not yet seen an impact on its own bad debt as a result of the action, Commaret is concerned about the supplier’s ability to collect bad debt in the future.
He added: “So it’s difficult, we don’t have enough information and insights to say that bad debt would be increasing.
“But at least what is extremely clear is that prepayment is a way for the customers to pay for what they consume, stop accruing additional debt and we can eventually help them put in place an instalment plan in order to repay part or the totality of their debt.”
He further warned against aggravating the situation, and highlighted an incident in France when there was a public outcry over energy suppliers collecting debt in winter.
“In France a few years ago we had a very similar debate, where people were saying ‘why are the energy companies collecting debt during the winter, when people need to heat their houses?’
“The public opinion was ‘let’s ban collecting debt because you are hurting the customers’. Unfortunately, what happened is that by banning the debt collection, the customers found themselves with much, much higher debt.”
Despite Ofgem recently announcing that the price cap will decrease by almost £1,000 in April following a major decrease in wholesale costs, prices are still well above levels seen before the crisis began.
According to new projections by the government’s statutory adviser on the issue, the average fuel poverty gap for low-income households looks set to have soared by nearly 75% during the past two years.
The fuel poverty gap – the reduction in fuel costs needed for a household to not be in fuel poverty – is projected to be £443 per annum this year. That is 31% higher than the projection of £338 for 2022 and 73% higher than 2021’s out-turn figure of £254.
Commaret will be speaking at the second day of Utility Week Customer Summit on March 22.