Unhappy customers show all too clearly how energy market is failing – it’s time to get it fixed, says Richard Lloyd
OUR latest annual satisfaction survey shows that customers still feel they are getting a raw deal from the dominant big energy suppliers, with smaller competitors wiping the floor with them when it comes to keeping customers happy.
Our survey asked thousands of customers for their view of their energy supplier and customer scores are based on overall satisfaction and the likelihood of recommending the company to a friend. The results are pretty grim reading for customers of Scotland’s big three energy companies ScottishPower, SSE and Scottish Gas. These three firms dominate the Scottish energy market but have, along with EDF, E.ON and npower throughout Britain, all scored much lower than smaller rivals yet again.
Although the average industry score increased from last time, our survey found big companies with millions of customers are still falling down on the basics of customer service such as dealing with complaints or ensuring bills are accurate and clear.
For the fourth year running, npower was bottom with a satisfaction score of just 35 per cent, scoring just one star out of five for most of the criteria we looked at for the survey. In fact, the six largest companies, which account for around 90 per cent of the British market, can all be found towards the bottom of our table, with none of them scoring above 50 per cent.
By contrast, the top spot has been awarded to Ecotricity with a score of 84 per cent, closely followed by Good Energy (82 per cent), Ebico (81 per cent), Ovo Energy (80 cent), Utility Warehouse (76 per cent) and Flow Energy (73 per cent) – all are smaller independent providers.
Scottish consumers also tell us that energy prices are their top financial worry, with around seven in ten people (68 per cent) reporting concern. Our energy bills have risen dramatically, from about £500 in 2005 to now stand at more than £1,300 for an average annual dual-fuel bill. Yet around two-thirds of households are on standard variable tariffs, which tend to be among the most expensive.
In a truly competitive market, suppliers should be falling over themselves to cut prices to attract new customers, but this winter we have only seen modest price cuts to standard gas tariffs.
Customers are right to question whether the price cuts go far enough in response to a significant shift in wholesale prices, which have been falling for months. Some of the price falls don’t come into effect until the end of February and no doubt energy customers will be questioning why they must wait so long to see their bills cut.
Trust in companies also remains worryingly low. Government data also shows Scottish households are more likely to choose a local energy supplier than the UK average, but we found Scottish consumers are less likely than people in England to trust energy companies to act in their best interest (10 per cent compared to 18 per cent in England) and half (50 per cent) strongly agree that energy companies prioritise making profit over serving their customers (compared to 40 per cent in England.)
Little wonder then that the entire market is under investigation by the Competition and Markets Authority. We need this inquiry, which reports at the end of this year, to propose radical remedies to fix this broken market. It must also get to the bottom of whether our prices are fair, whether falling wholesale energy costs are being passed on to customers fairly, and whether a lack of competition leaves us all out of pocket.
But in the meantime, instead of waiting for the outcome of the competition inquiry, we are urging companies to make immediate improvements to help restore trust among their long-suffering customers. This survey should be a wake-up call for the companies with the lowest customer scores and they need to up their game as their millions of customers deserve better.
Energy suppliers could also help us to get better deals by using simple, directly comparable pricing, similar to petrol pump displays, so people can more easily compare prices and make the best choice if they switch.
If you think you’re missing out on the cheapest deal, the best thing to do is explore whether there is a better energy deal for your circumstances. Which? Switch is an independent service that searches the market to provide a comprehensive, transparent and impartial view of your gas and electricity options, including supplier and tariff ratings to help you decide on service as well as price.
Which? is running a Fix the Big Six campaign and has an online petition (www.which.co.uk/bigsix) where people can pledge their support to help us fix the broken energy market.
• Richard Lloyd is executive director of consumer group Which?