Islington Council has launched London’s first new municipal energy company in more than a century under the name Angelic Energy.
The not-for-profit supplier has been created by the local authority to aid its efforts to combat fuel poverty and inequality within the borough.
“We took this step to deliver fairer energy bills and to take on the big six, who still have a stranglehold on our energy retail market,” said Islington Council executive member for environment and transport Claudia Webbe.
“Unfair energy pricing means that we have thousands of residents right here in this borough who are languishing in fuel poverty,” she told the audience at the launch event. “I have constituents who each winter must choose between heating and eating, and whose health suffers from living in cold, damp homes.”
One of the main groups Angelic Energy will seek to help is residents in the borough using prepayment meters, who are estimated to number 23,000. Webbe said many are resorting to “self-disconnection” as they are forced to choose between “feeding their meters or feeding themselves and their children”.
The supplier will also target disengaged customers, in particular private tenants and the elderly. Webbe noted that, along with prepayment customers, many renters “don’t realise that in the majority of cases they can switch.”
“We hope that by using the council’s status as a trusted brand, that we can encourage these people to switch,” she added. “For those who have never switched or haven’t switched in a long time, we estimate that they could save over £200 on average by moving to Angelic Energy”.
She said the new supplier forms part of Islington Council’s wider work to tackle energy issues in the borough, which also include the Bunhill heat network, the energy advice service Shine and its “leading” fuel poverty programme.
Angelic Energy has been set up as a “white label” company in partnership with Robin Hood Energy, the not-for-profit municipal energy supplier set up by Nottingham City Council. The arrangement means that Angelic Energy’s tariffs and customer services will be provided by Robin Hood Energy.
Three other municipal energy suppliers have already been set up in partnership with Robin Hood Energy under the white label model: LECCY in Liverpool, White Rose Energy in Leeds and most recently Ram Energy in Derby. They will soon be joined by Great North Energy, which Doncaster Council has just announced will be launched on 7 November.
Robin Hood Energy head of contract management Rob Purdon said: “We believe that local authorities joining together in local partnership type models is a more cost-effective means of bringing new brands to the market, when objectives are clearly already well aligned.”
He told Utility Week that one more local authority partnership will be launched by the end of this year, saying it would be located somewhere in the south of the UK. He added that there are currently no plans to launch any further partnerships next year, although “obviously if there are any opportunities that come our way we’ll look at those”.
Purdon said Robin Hood’s partnerships with local authorities as well as national not-for-profit supplier Ebico form a “significant part” of its customer base and strategy for growth: “We realised early on that as an energy supplier we couldn’t just operate in Nottingham and consistently deliver competitive tariffs and competitive pricing. We needed to be bigger than that. We needed to get to a certain size and we’re well on track for that now.”
Robin Hood Energy is now supplying energy to around more than 100,000 customers around the UK. They include 13,000 households in Nottingham – roughly one in ten in the city.
The supplier hiked the price of its standard variable tariff by 17 per cent from April, blaming rising wholesale costs. Purdon said it was the first time Robin Hood Energy had raised its prices since being formed in 2015 and partly reflected the company’s decision to defer the price hike until after winter.
The October before, another new entrant, GB Energy Supply, increased the price of its standard variable tariff by 30 per cent before going bust the following the month. Consultancy firm Cornwall Energy identified a flawed hedging strategy as the cause of the failure.
Asked by Utility Week, whether Robin Hood Energy is sufficiently protected against wholesale price increases, Purdon responded: “We don’t go for a very short-term, short-sighted hedging approach. We’ve got a lower risk, longer term hedging strategy that we think is going to serve us well throughout the coming winters.”