What I’m going to tell the PM at today’s energy summit…

I’ve spent this morning thinking, reading and making points for this afternoon’s energy summit. It’s hosted by the PM and Energy Minister Chris Huhne, and the big six energy providers, regulator Ofgem and a few consumer groups will be there.

The meeting is a closed meeting, so I’m not supposed to divulge what’s said, in order to aid open discussion. So I thought why not publish my notes in advance of going. These are a mix of my provisional thoughts and your feedback on the PM’s article on energy, which we published on the site this morning.

They’re very scrappy, short-hand personal memory cues (in no particular order – I’ll prioritise later) so I hope you’ll get the gist…it’s worth noting quite a few of the simplicity measures have already been proposed. Yet I think tackling the barriers to switching and getting faith back in the system are priorities.

  1. People have little faith in this summit. This cannot just be a talking shop. We need to see real, concrete, immediate action taken on the back of it.
  2. Winter is coming. Prices need to come down now, full stop. £1,345 per year average price is too high. Wholesale prices have dropped, so energy companies need to cut prices – there is huge anger in their high profits and our high bills. The PM needs to deliver reductions.
  3. Switching needs to be easier and quicker, and to work – too many are put off by the process. Many worry about cash flow, as by switching they’ll need to meet any debt hangover there and then. Plus there are many barriers still in place.
  4. After the terrible decision to shut Consumer Focus, who will regulate comparison sites?
  5. There needs to be price certainty when you switch, for example the price given at that time should not be allowed to rise for a set period – e.g. 9months or a year.
  6. Need to incentivise owners of rental properties to insulate and be more energy efficient.
  7. End to doorstep sales – it has hindered, not helped and it annoys people, although at least energy companies should now obey no cold caller signs unlike others companies.
  8. We need to get people to focus on their tariff, not their company. Tariff names need to be more distinct from each other to stop confusion.
  9. People want LESS choice. There is overwhelming support to get rid of confusing tariffs, as seen in our poll results (see the Should we simplify tariffs? poll result). Confusion marketing by the industry has shot itself in the foot.
  10. Decent compensation should be given to those who’ve been mis-sold in the past (see the Energy mis-selling guide). There are also a lot of disaffected people who just miss out on warm home discount and don’t qualify. Many working families on low to mid incomes are being slapped across the face by high costs.
  11. The Government and the regulator need to smarten up – yelling ‘switch’ at the wrong time leaves people burned. NOTE: my press release comment on the PM’s statement is…”Past behaviour from all parties, and the regulator, has shown they don’t understand the real world of bills. They need to get more sophisticated.

    “I’ve lost count of the times I’ve heard them yell ‘switch’ when energy companies hike prices. Swathes of consumers are burned as a result, as they move from the frying pan to the fire as their new provider hikes bills too.

    “After such an experience, many won’t switch again. In fact, the time to compare, switch and save is later, once all companies have increased prices (as they have now) so there’s a level playing field and you can see who’s truly cheapest.” PS. If you haven’t done a comparison do one now, see the Cheap gas & electricity, plus cashback guide for more info.

  12. Why do lower users pay more for units? The discounts for high usage ‘push’ behaviour the wrong way.
  13. Direct Debit and price confusion – needs clarifying how DD will be set. People need to be encouraged to give readings – smart meters when introduced, should help.
  14. Language of ‘savings’ leads to disappointment in the market – as bills may still rise, just not as much. People gain from switching but they don’t feel or realise it. This needs to be tackled as it’s one of the reasons for disenfranchisement in the system.
  15. It’s about time home heating fuel got some regulation too.
  16. Prepay customers are still 2nd class energy citizens trapped on higher bills. While it has improved, it’s still not enough. The rental legacy issue is a problem, as is the cost of switching to a credit meter even when your credit score is good enough.
  17. Comparison sites coming up with different answers doesn’t help the trust – needs more work to ensure that this adds up.
  18. Need to encourage phone based switching for older people, so they don’t have to go via the internet.
  19. Annual statements launch was farcical. Why not just make bills clearer and force providers to list what tariff you are on along with a summary box on exit penalties, when any discounts change, when you last switched and whether any lower rate tariffs exist?
  20. We need more insulation and energy efficiency initiatives delivered directly. Plaudits to British Gas for its insulation scheme and the fact all customers with dual fuel get it – not just a limited tranche.

Strong notes from users

  1. People don’t believe competition has worked, calls to renationalise.
  2. General view is that energy companies are profiteering.
  3. Some say why have a go at energy companies for huge profits, when an even bigger chunk is made up from tax.
  4. Lack of competition with only six main suppliers in a vertically integrated market.
  5. Big added costs to our bills, which only result in companies giving away a glut of free energy saving light bulbs isn’t good for anyone.
  6. Public worry that big green energy investments will push up prices – many are unhappy about this added chunk on bills. In a rough spot Facebook poll this morning 3 to 1 favoured prioritising low bills rather than green investment.

I’m disappearing off soon to go to the meeting, but I will try and glance at any comments below beforehand.

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