Ofgem publishes reasons for collective switch trial

Energy regulator Ofgem has published its notice of reasons for suppliers to partake in a large-scale collective switching trial which was conducted last Autumn.

Ofgem issued the notice, following the completion of the trial, because it did not want publicity while it was ongoing in case it prejudiced the results.

The trial required each of the three participants to identify up to 100,000 domestic customers and to contact them regarding a potential switch.

It followed a smaller-scale trial held towards the beginning of 2018 which was designed to test whether a collective switch would prompt engagement from consumers who have not recently swapped energy supplier or tariff.

Ofgem said it wanted to understand if the results of the first could be replicated on a larger scale.

Big six supplier Npower confirmed it was one of the suppliers which took part in the larger trial but Ofgem has so far refused to name the other two suppliers involved.

Npower applied for a judicial review into the trial which was subsequently rejected by the High Court.

In April Ofgem revoked the provisional order it had earlier imposed on Npower which forced it to co-operate fully in the trial. Ofgem said it was “satisfied” that the supplier had complied with the order, meaning it was no longer necessary.

The smaller trial ran from February to April and involved 50,000 disengaged customers from a “large supplier” who had been on a standard variable tariff for three years or more. The company was unnamed at the time but Ofgem has since confirmed it to be Scottish Power.

The results, published in December, found customers who received multiple communications were eight times more likely to switch than those who did not.

In its final report on its energy market investigation, the Competition and Markets Authority (CMA) recommended that Ofgem establish an ongoing programme to identify, test and implement measures to provide domestic customers with “different or additional information” with the aim of promoting engagement.

This resulted in the establishment of the collective switching trials.

Ofgem plans to publish a summary of all its research trials later this year.