Now let’s get competition working for UK energy customers
London, 12 MAY 2015: OVO Energy, the UK’s only Which?-recommended energy provider, has today published new evidence to the Competition and Markets Authority (CMA), ahead of major findings expected in the next few weeks from the Authority’s energy retail market investigation.
The new evidence has found:
The gap between the Big 6’s average Standard Variable Tariff and their cheapest deals has widened in recent months. This underlines the existence of two energy markets; one for active switchers, and one where loyal customers are punished.
The Big 6 appear to be using their large blocks of inactive customers to subsidise protective, loss-leading tariffs. This damages competition.
When these protective tariffs disappeared from the market, independent suppliers’ share of switches rose from 21% to 50%. Since the protective tariffs have returned, this has fallen to 30%.
OVO has consistently called for reforms of the market to both drive competition and protect the most vulnerable customers. Speaking at the 1922 Committee’s Welcome Reception for incoming Conservative MPs (to be held in Parliament later today), OVO’s Head of Corporate Affairs, Jessica Lennard, is expected to say:
“With a price freeze off the table, some energy companies clearly think it's back to business as usual, profiting by overcharging and underserving loyal customers. What's needed now are strong signals from the new Government and the CMA that, far from letting the momentum slide, they're more committed than ever to fixing this market.”
CEO and founder, Stephen Fitzpatrick said: “We have always been clear the answer is more competition, backed up with effective regulation which protects customers from being ripped off. There's been a lot of uncertainty and delays, but we're now at a point where an ambitious CMA outcome and a new, pro-competition Government can deliver real change for customers.”
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OVO has been a vocal champion of greater fairness and transparency for UK energy customers, and has a proven track record of offering award winning customer service with consistently competitive prices.
Introduce a principle of cost-reflectivity, so that loss-leading tariffs are banned from the market;
Create a default social tariff for vulnerable customers to protect those not benefiting from competition.
Since Labour’s price freeze announcement in October 2013, OVO continued to price 'cost reflectively' (according to the real cost of doing business) rather than inflating its prices in anticipation of a Labour government. OVO estimates its cheapest Standard Variable Tariff offer was £77.44 (6.6%) cheaper over this period than the average Big Six Standard Variable Tariff.
Headquartered in Bristol, OVO Energy is one of the leading independent suppliers in the UK energy retail market and the 10th fastest private growing business in the UK.
OVO was founded in 2009 by Stephen Fitzpatrick who set out to create a better energy company.
OVO now has 460,000 customers, has created over 750 jobs and become the only Which?-recommended energy provider – ever.
OVO topped 10 of the 12 award categories at the 2014 uSwitch Energy Awards, (including value for money and customer service) and topped of the Money Saving Export poll for customer service, with 82% of customers giving us a ‘great’ rating.
OVO operates a policy of 'cost reflective pricing', making sure that customers are charged a price which reflects the real cost of doing business so that they can trust they are receiving the best deal possible.