Greg Jackson has expressed disappointment that large suppliers are resorting to “traditional energy industry infighting” instead of coming together to help the most vulnerable customers.
The Octopus Energy chief executive said his firm had proposed a standardised form to be used by suppliers to assist vulnerable customers but it had not been adopted by the wider sector.
An online form is currently available to Octopus Energy customers and asks questions about their financial situation, the type of support they would like from the supplier and how the coronavirus pandemic has affected the household.
Octopus had hoped that this could be standardised and used across the wider sector and Jackson has previously stressed that all customers should have access to support in the same way regardless of their supplier, adding that it “shouldn’t be a lottery”.
However during Utility Week’s latest #AskUsAnything webinar on the effects the pandemic is having on the energy retail market, Jackson said the initiative did not take off within the wider sector and warned some companies may attempt to “weaponise” their balance sheets without such a scheme.
Jackson said: “Right at the outbreak of social distancing Octopus proposed a standardised form. We prototyped it, shared it with the industry and said we can host or provide it to be hosted by Energy UK or by government so that customers can have a clear, fair and transparent single place to go. Sadly that initiative didn’t work.”
He added: “If we can do something with our own resources within the sector to help customers on a standardised basis, those people who are facing these very difficult circumstances are not subject to the lottery of what energy company they happened to be with when coronavirus hit. Instead they can rely upon the same support regardless who they are with. Companies can issue that knowing there is some scheme behind it, then I think we can do a much better job for people who need it most.
“Sadly what I’ve started to see is the signs of traditional energy industry infighting, some companies trying to weaponise their balance sheets and others taking the first opportunity to furlough customer service staff while not answering the phone to customers and so on.”
The Octopus chief said a sticking point for the plan had been that the assumption that it would be backed by government funding and would consist of a loan which companies would administer to go directly to their consumers who would in turn pay it back over time, with bad debt being mutualised.
He added: “What happened was a bunch of companies came up with their own variant or a reason not to do it and what had been a pretty solid kind of agreement I think, for understandable reasons, it didn’t quite catch and we’re at the point now where we have got to think about an alternative.
“It would be great if we do think of one, it’s just that time’s passed and bit by bit as companies bring in place their own schemes it gets harder and less relevant to have a standard one.”
Jackson added that the form is just to help domestic customers and that the business retail side is more complex because of different businesses having a very different set of needs.
“On the business to business side it is more complex because it really is so industry specific – every company is going to have a very different set of needs and I think the important thing there probably is to look much more at a general case by energy retailers,” he said.
Price cap
During the webinar Jackson slammed the “knee-jerk” reaction of some of the incumbent suppliers talking about the need to raise the price cap, adding that the cap has already had a “tremendous” impact on helping 11 million customers before the negative financial impacts of coronavirus took hold. He also took aim at larger suppliers offering two-tier pricing.
He said: “The prospect of relaxing that during a recession is particularly worrying and I think companies in the sector need to carry on the efforts they have been doing to become more and more efficient to make things work in a price cap.”
“The whole point of the price cap is if you can afford to offer prices hundreds of pounds below that to one set of customers, than you can offer better value than the price cap to another set of customers. Two tier pricing is the issue, it’s not the level of the price cap,” he added.
Furthermore Jackson spoke about the effects coronavirus could have on the supplier of last resort (SoLR) process, adding that the last thing the industry needs right now is a “cascade of SoLRs”and that the effects of attempting to take onboard customers via the SoLR process during the pandemic may be “catastrophic” for customers.
“It’s hard enough to do a SoLR when you can get on someone’s premises, meet their team and download their data. To try and do it during this period could be catastrophic for customers so I think Ofgem recognises right now the job is to put customers first and thy’re very supportive I think of finding a way of doing that,” he said.