Competition authority says complaints soar
Energy customers ‘missing out on savings’ by not switching
Research by the Competition & Markets Authority found that more than 95% of dual fuel customers in particular seem to be missing out on potential savings of up to £234 a year.
The investigation by the CMA was launched last July and will report its findings in full in May.
It has been undertaken after the energy regulator Ofgem expressed concerns over the dominance of the industry by six big operators – SSE, Scottish Power, Centrica, RWE Npower, E.On and EDF Energy – which together account for about 92% of the UK’s energy supply market.
The interim findings also found complaints against these operators rose fivefold between 2007 to 2013. These were mainly about problems concerning billing, customer service and payments.
“We note that increasing numbers of complaints may reflect: declining quality of service; price rises; changes in reporting standards; increasing media scrutiny of the sector; or a combination of these factors,” says the report.
Responding to the report, SSE – which trades as Scottish Hydro – said it will “maintain its approach of working constructively with the CMA”. It said it continues to believe that an “independent and authoritative market investigation” will help to address key issues and as a result help to restore the confidence of both customers and investors.
It said “SSE retains its appetite for reform that gives customers confidence, allows regulators to regulate, and encourages investors to invest in the Great Britain energy market.”
Alistair Phillips-Davies, chief executive of SSE, added: “While they clearly result in a degree of short-term uncertainty, the continuing energy market investigation along with the forthcoming UK general election do provide opportunities to achieve greater regulatory and policy stability in the GB energy market, for the benefit of customers and the required investment in the country’s energy system. It is in everyone’s interests that we have a trusted energy market that not only works for customers but is seen to do so.”
Energy and Climate Change minister Ed Davey said: “The CMA is looking at whether consumers get a fair deal from energy companies – and that’s exactly why we’re backing their investigation. We’ll be looking at their initial report in detail.
“The thrust of the report seems in tune with the action we are already taking to drive competition in the energy sector. Our reforms to the market have all been about greater choice, backing new firms challenging the Big 6 and putting pressure on energy companies to put their customers first.
“My message for consumers is the same as these early findings – don’t stick with a supplier if you’re not satisfied – now’s the time to shop around for a better deal, switch suppliers and save.”
Rhian Kelly, CBI Business Environment Director, said: “The investigation of the energy market is a valuable opportunity to clear the air and ensure the market delivers for consumers and businesses.
“The statement of topics being investigated is a welcome indication of the Competition and Markets Authority’s progress to date.
“It is vital that the CMA’s investigation is allowed to run its course free from political influence and direction.”
A spokesman for Ofgem said: “Ofgem is determined to make the energy market work for consumers and ensure that there is vigorous competition which bears down on prices and drives up standards of service. This is why we referred the market to the CMA last year to consider whether there are barriers to effective competition. We therefore welcome the updated issues statement published by the CMA today and will be considering this carefully before responding.”
Juliet Davenport, chief executive of independent supplier Good Energy, said: “We welcome this latest stage of the CMA inquiry. This is an opportunity to transform the energy market so that it works for the benefit of consumers, not just the old suppliers. Better competition means more choice.”