MSE News: Group switching 'could transform utilities'

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"Collective switching by consumers between utility firms could finally end poor deals and unresponsiveness from suppliers ..."

Read the full story:
Group switching 'could transform utilities'

Ken68

Collective action is getting a bit political, unless of course it can be proved that the energy supppliers are in a cartel.
Then I'm all for a bit of socialism to redress matters.

dogshome

Collective Switching works in Netherlands/Belgium/Germany ?
We need to know a lot more detail as how it operates in these countries before saying "Yes that's for me".

In particular, just what is the common interest that customers have to group together and form a 'Collective' Co-op?.
If it's neighbors in in an area, our fragmented supply industry with different pricing in different areas won't work - Regulars on this site know full well that the best Supplier & Tariff for one house, won't be the best for the house next door with different useage patterns and they need a tariff from different supplier

Who is going to issue the rule-book as how a Co-op is formed and how it negotiates with the suppliers, and most importantly, where does the presumably elected individual doing the negotiating get his/her training ?
I get the worrying feeling that it will all lead to yet another raft of Freelance Agencies, a la Business Supply Contracts, pushing their services for a fee

Consumerist

Energy Secretary Ed Davey says: . . . "We are working to remove barriers to getting new collective purchasing schemes up and running, and I want to see suppliers engaging positively with these initiatives."

Currently the SLCs prohibit discrimination between groups of customers :-

25A.2 Subject to paragraph 25A.3, the licensee must ensure that in supplying or offering to supply gas, the Principal Terms on which it does so do not discriminate without objective justification between one group of Domestic Customers and any other such group. For the purposes of this condition it shall be for the Authority to decide whether there is any such objective justification.

25A.3 The licensee shall only be in breach of this condition if and to the extent that the nature of the discriminatory terms offered and/or their impact on any Domestic Customers is material in any respect.

So how can the supplier offer any preferential terms to a co-operative?

pennywise63

Consumerist wrote: »

Currently the SLCs prohibit discrimination between groups of customers :-
So how can the supplier offer any preferential terms to a co-operative?

Its all stitched up then ?. Customers who are not on computer or not good at reading or mental arithmetic,single parents with no time to sit and work through the hundreds of different tarrifs, they are already being discriminated against.

Consumerist

pennywise63 wrote: »

Its all stitched up then ? . . ..

Well, from the article, Energy Secretary Ed Davey says: . . .

We are working to remove barriers to getting new collective purchasing schemes up and running, and I want to see suppliers engaging positively with these initiatives."

So there could be a change to the SLCs to enable collective switching or the Authority may be persuaded to decide that collective switching is an objective justification for any "discrimination".

Consumerist

pennywise63 wrote: »

Customers who are not on computer or not good at reading or mental arithmetic,single parents with no time to sit and work through the hundreds of different tarrifs, they are already being discriminated against.

I accept your point regarding those who are not online but comparison sites do all the necessary arithmetic and present the results in a list with the cheapest at the top. There should be little need to do any arithmetic, mental or otherwise. It should normally take only about 10 minutes to fill in consumption details and get the results.

Terrylw1

It will take much more than a change in SLC's though. That just covers the customer end.

Anyone who understands the data end will know that their limits and the processes are not a matter of changing a name in a database. The market itself is just not set up to handle it and anyone who has experience of bulk change of agent activity will know its a project requiring planning, governance, proper control, issues & risks plans, contingencies.

Despite the industry limits on daily volume, I notice neither Ofgem nor CF have commented on the 20k customer switch cap. How on earth are they going to argue that customers in the big switch itself haven't Bern discriminated against when those last to go haven't had the rates they wanted for X days...do they think the old supplier will be lowering the rates to match it? I don't think so!