Three of the big energy suppliers have announced price increases in as many days. On Friday 12 October, British Gas led the charge. Hours later, npower scrambled an announcement. Then yesterday, Monday 15 October, Scottish Power took advantage of the political cover offered by the other two and announced its own increase.
Here are the details:
|Electricity % increase|
|Gas % increase|
Source: company press releases
Like the number 73 bus which I used to catch in north London, not only did they all arrive at once, they even looked identical on the outside. They all used the same excuses: rising costs of government “green” programmes, rising regulated costs of distributing energy and rising wholesale energy costs, all factors supposedly outside their control.
So how can Co-operative Energy, a new entrant to the energy industry and a minnow compared to these giants, promise to freeze its prices until next Spring? Are we magicians? No, we experience the same cost pressures as the big six. It’s all down to whose interests you’re really protecting.
All the big six are public companies owned by external shareholders. Shareholders expect rising profits and rising share prices. There’s a direct conflict between looking after your customers and satisfying your shareholders. Look how the share prices of Centrica (the parent of British Gas) and SSE rose in the hours following the announcements of their price increases. Shareholders 1 Customers 0.
That’s why Co-operative Energy entered the market. By taking shareholders out of the equation and putting our customers in charge, we have to put customers’ interests first. If we didn’t, we’d soon know about it. Of course we have to make a profit to create reserves to protect us against unexpected risks, but we also have to ask ourselves constantly: “what would our customers expect?”
These latest price increases are so provocative in their timing and their uniformity that I simply have to throw down the gauntlet to the Big 6 to answer the following questions:
1. Do you think that announcing your price changes together and using the same excuses increases or decreases the public’s trust in the energy industry?
2. Do you think such behaviour is typical of a truly competitive market?
3. Why is the difference between your lowest price for new customers and your standard tariff for existing customers so wide?
4. Why do you wait for a customer to leave before offering special retention bonuses? Is this treating customers fairly?
5.How can you prove that you are not using your domestic energy customers to subsidise your business customers?
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