The key is investing in the communityby / September 3, 2018 / Leave a comment
Co-op Energy is a British-owned domestic energy supplier with a difference. We entered the market in 2010 determined to make a positive difference and provide a fresh choice for consumers who were tired of the dominant big 6, who controlled 99% of the market at the time.
We’re a cooperative, which means we are owned by our members, not shareholders, and we invest any profit in supporting community projects, developing our business or returning it to our members. We believe in contributing to our society: we are Fair Tax accredited and all our electricity is from 100% renewable sources, and an increasing number of our tariffs include a proportion of green gas. We are one of the biggest supporters of renewable community energy schemes in Britain. In 2017 we had 42 community energy power purchase agreements (up from nine in 2014) and right now we have 54. We are always looking for more, but planning permission is a real restriction, particularly for new onshore wind.
The price of energy is rightly a priority for politicians as energy is an essential service. We support the government’s energy price cap, and gave evidence to the BEIS Committee inquiry, but I know the cap will not ‘fix’ the market. Consumers who actively switch will still benefit from cheaper prices. This is a problem, as many consumers, particularly if they are vulnerable, find switching a daunting prospect, even though it normally happens without a hitch. We need to do more to increase the reliability of switching, as well as the perception of reliability. But we also need to accept some customers don’t want to switch and I want government to introduce a permanent safeguard tariff for vulnerable customers, provided by all energy suppliers irrespective of size, which will ensure vulnerable customers are always protected, even when the price cap is removed.
Supplier failure is becoming an unwelcome feature of the market, with GB Energy, Future Energy and Iresa all recently going under. I think there will be more. Ofgem’s Safety Net means consumers’ credit balances are protected when a supplier goes bust, but the cost of repaying credit balances is ultimately met by all consumers through a levy on suppliers. Some suppliers offer loss leading tariffs to gain market share quickly, collect payment in advance rather than in arrears to fund their growth, and do not hedge their wholesale energy requirements fully or at all. It’s not fair these risky business models are underwritten by consumers and we need Ofgem to urgently introduce additional checks and balances for new entrants to ensure consumers are protected.
And finally to the smart meter rollout. I am hugely supportive of the country’s smart meter rollout: smart meters will bring an end to estimated bills – a major source of complaints – and help restore trust between suppliers and consumers, and allow us to innovate with new products and services. However, the current 2020 deadline for the completion of the rollout is unrealistic. We support the Citizens Advice campaign for the deadline to be extended to 2023. The smart meter rollout is a once in a generation opportunity to engage meaningfully with all our customers, so let’s make sure we do it right, not just quick.