Co-operative Energy welcomes the Energy Minister Charles Hendry’s announcement today that the threshold above which energy suppliers must comply with some of the more costly regulatory requirements is being raised from 50,000 domestic customers to 250,000 domestic customers.
The reason given by the Minister for this change is to stimulate greater competition in the energy supply market so that consumers benefit from more choice.
Charles Hendry said: “Currently, over 99% of people get their energy from just six big companies. Reducing red tape for smaller suppliers will help them grow and encourage new players into the market. Increased competition can help bring down prices and encourage innovation, benefitting energy consumers.”
Presently, once a supplier reaches a customer base of 50,000 domestic customers, it must participate in a number of Government programmes to encourage energy efficiency and relieve fuel poverty. Of course, in their aims and objectives, these programmes are very closely aligned with Co-operative business values. But the programmes themselves – the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP) – were designed with the Big 6 in mind and have a minimum compliance cost of at least £1.5 million, according to DECC’s own regulatory impact assessment.
By lifting the threshold at which these programmes become mandatory, the Government is acknowledging that small suppliers and new entrants need a bigger customer base and a more established business before they can afford to participate in these big national programmes.
Co-operative Energy can now develop its own policies to encourage energy efficiency and to help people on lower incomes in the knowledge that these tailor-made co-operative policies can endure for some considerable time before the Government programmes become mandatory.