David

We received the following communication from Utilita today:

Utilita has today made the incredibly difficult decision to temporarily cease taking on any new customers or void properties.

There are many factors, but primarily this is down to two: the unprecedented worldwide energy crisis – with gas prices alone going up 12% in one day, [fortunately there has been a sharp price drop today 17th Sep  21!ed.] and rising – and the stifling effect of Ofgem’s price cap.

The reality is any new customers we take on will lose us money – and we cannot let that happen. We must protect our staff, customers and our business.

We will not be alone.

This is a perfect storm – all out of our hands – of unprecedented price hikes, demand elsewhere and, significantly, unwelcome interference from the regulator, coupled with inertia from the Government.

Ofgem’s price cap has already contributed to nearly 40 suppliers either collapsing or deciding to exit the market since 2017.

Prior to 2017, only one supplier collapsed. [In how long? ed.] That tells its own story.

The unintended consequences of a policy, supposedly designed to protect the consumer, is doing no such thing.

Instead, it has contributed to greater uncertainty amongst both suppliers and consumers, sudden and steep price rises, and a reduction of genuine competition. [Perhaps if some suppliers would not have ripped off standard-tariff customers, a price-cap would not been necessary…ed.]

As we said, this is a temporary measure – and one we are hugely frustrated by – but we cannot give any timeframe as to when we can take on new customers.

Please rest assured our service to our existing customers will remain unaffected. That will remain our priority.

Utilita Energy

Alpine Utilities  reached out to OFGEM to intervene against exorbitant out-of-contract rates.

Alpine wrote:

I am looking at a recent electricity bill from British Gas to a customer, who unfortunately got out of contract for a few days.

The charges are exorbitant with 31.162p/kwh, which is about double the contract rate.

While domestic standard rates have successfully been capped, some suppliers still exploit business customers when they are out-of-contract.

Although, it is perfectly acceptable to charge a higher rate to customers out-of-contract, but double the price is an unjustifiable rip-off.

As customers often go out-of-contract due no fault of their own and sometimes not even realising it, and in such cases are at the whim of the suppliers, I would like to see OFGEM to limit the rate suppliers can charge to customers on a default rate.

Since, going out-of-contract is often a result of missed, invalid or late termination, a probe by OFGEM into the termination/renewal issue may be in place as well. Some suppliers lap a termination if not supply has not been transferred within 30 days. Again, an illogical clause to the detriment of the customers.

Many Thanks

OFGEM however declined: 

Ofgem does not have a direct role in investigating or resolving individual consumer complaints and therefore we are unable to provide specific advice in response to your query. However, in order to give as much assistance as possible, we have provided some information below which you may find helpful. Please note that the information provided is not intended as any form of legal advice or to be fully comprehensive.

With the exception of imposing a Price Cap on suppliers covering prepayment, standard variable and default energy tariffs, it is not Ofgem’s statutory role to dictate what prices suppliers charge, nor any tariff entry criteria they wish to apply, nor the types of tariff on offer. These are commercial decisions that suppliers must make themselves. Ofgem does not agree prices with suppliers, and it is not for Ofgem to comment on or take enforcement action over particular prices / tariffs being charged by suppliers, provided that they do not exceed the price cap levels (if the tariffs are of the type covered by the Price Cap) and are not otherwise unlawful.

The consumer should check the terms and conditions of the energy contract they signed up to for all relevant information relating to length of term, termination fees etc and refer to the energy supplier for further clarification if required.

I hope this has been helpful.

Mr Lande, Director of Alpine Utilities commented: Ripping off customers at any stage is unacceptable, and we would expect the government to take action against such malpractice. OFGEM should not hide behind a principle of it is not Ofgem’s statutory role to dictate what prices suppliers charge  

If they managed to impose a Price Cap on domestic suppliers, the should be able to do the same for micro-businesses.

We have just been informed that Scottish Power renewals policy is to renew it only from the 1st of the Month.
To make matters worse, if a renewal application is being submitted late in the month it may not have enough time to book it for the following 1st but only a month later.

In this way, customers can be out of contract for several weeks following their renewal application.

We believe this unacceptable and have challenged it with a formal complaint and will take the matter to the Energy Ombudsman if necessary.

At Alpine Utilities the customer’s rights are at our heart and we will do everything to get them justice.

OFGEM issued yesterday a letter to suppliers, outlining their expectations for energy suppliers who are dealing with domestic and micro
business consumers when undertaking charge recovery action (also called backbilling).

https://www.ofgem.gov.uk/system/files/docs/2020/12/open_letter_on_expectations_for_energy_suppliers_undertaking_charge_recovery_action_0.pdf

The purpose of this letter is to remind relevant energy suppliers of the requirements placed
on them by supply Standard Licence Condition (SLC)
1 21BA (‘SLC21BA’) with respect to
charge recovery action, so they apply the relevant consumer protections consistently and
accurately.
Based on information we have received from consumer bodies (Citizens Advice, Citizens
Advice Scotland, the Extra Help Unit and the Energy Ombudsman), we are concerned that
suppliers are not correctly and consistently adhering to SLC 21BA, which sets out the
conditions under which suppliers can recover charges for the supply of gas or electricity
(the Backbilling Requirements)

In summary the letter states: Ultimately, it is the responsibility of suppliers to bill consumers correctly for their usage and
to ensure consumer accounts are correctly reconciled. Consumers must not be held
responsible for failing to identify errors in their billing or that a debt balance is accruing.

While we welcome that OFGEM is taking the issue of backbilling customers seriously, we would like see better information of the public of their rights.

As in many other areas, we also believe, that protection of backbilling should be extended to non-micro businesses. Far too many small businesses don’t qualify as micro-business but still don’t have the resources, knowledge and experience to deal with all aspects of their utility bills.

Utilita has been reprimanded by OFGEM for continue to fit 1st generation smart meters (SMETS1), which can loose functionality when the customer switches supplier, instead of the latest generation SMETS2 meters.

OFGEM has warned, if they fail to fit 15000 2nd generation smart meters by 31st July 21 they could be banned from taking on new customers.

CUSTOMERS SHOULD CONFIRM WITH THE METER OPERATOR FITTING A NEW SMART METER, THAT THEY ARE GETTING A 2ND GENERATION ONE!

British Gas has recently introduced a new policy: They will no longer communicate with smaller brokers apart from accepting termination notices.

We find this totally unacceptable, as many customers rely on their brokers to resolve billing and other problems with their suppliers.

Customers have all the right to appoint a 3rd party of their choice to represent them with their suppliers.

We have raised this matter with OFGEM and hope the regulator will intervene against such practices.

OFGEM have announced that 3 companies pay combined £10.5 million over the 9th August power cut.

See link for full details:

Companies pay £10.5 million over 9 August power cut

This will hopefully send a message to all power generators and distributors to ensure security of supply.

We have just been informed by a supplier that the energy market is currently going through a significant volatility due to the latest EDF nuclear scare.

EDF reported that some of it components currently in use by french nuclear power stations are substandard.

EDF shares plunged 7% and the effect on global energy prices have yet to be seen. Should any of the French nuclear power stations, which provide 80% of the country’s electricity, need to be halted that can shoot up both gas & electricity prices.

A silver lining in this latest development may be the extra push for more renewable energy.

OFGEM has recently published a report investigating the possibility of changing the price cap model for domestic consumers on the expensive variable tariff to a cost pass-through tariff.

In response I have written to OFGEM asking why is there no price cap on out-of-contract tariff for business customers and we received the following response:

Thank you for your email.

There are currently no price caps in place for business contracts, however we recommend that business customers should talk directly to their suppliers to see if they have any better offers. Note that if you are consuming energy on a default – or deemed – tariff, the supplier has an obligation to take all reasonable steps to tell you about other available contracts and how you can get information on these.

Kind Regards

Georgia
Consumer Affairs

Assistant Manager

Commonwealth House

3rd Floor

32 Albion Street

Glasgow

G1 1LH

www.ofgem.gov.uk

We still believe suppliers should not be free to charge out-of-contract rate at any level they wish and OFGEM should either impose a cap or make it a license condition that any deemed rate must reflect actual cost.

Two supplier’s who previously offered cash & cheque payment method have reviewed their policy.

SSE have communicated they no longer offer CC payment but customers can choose between fixed monthly or variable DD.

Similarly British Gas are restricting  DD payment only to small customers (<50’000kwh electricity or <73’200kwh gas).

With this growing list of supplier’s accepting DD payment only, organisations of all sorts and sizes are well advised to set up their accounting procedure to allow DD payments. Payment by CC to those supplier who still allow it may attract a premium. So payment by DD will usually save them money, too.