Payout plan for problems switching energy suppliers

Plans announced by the regulator Ofgem last week to compensate Midlands householders who have suffered problems switching energy suppliers have been welcomed.

“Any moves to help residents to reduce their bills are good news and long overdue,” said green expert Ron Fox, of Noreus Ltd on the University of Keele Science and Innovation Park.

Under the scheme companies, who make errors when customers want to switch, such as moving them to the wrong company or being too slow to send a final bill or taking too long to complete the move, will have to pay up to £60 in compensation.

Both the regulator and Ofgem have spent years encouraging people to switch suppliers to get a better energy deal.

But research has shown many people don’t bother because they are worried there will be problems or that they tried once before and it didn’t work out.

More than five million electricity customers and four million gas customers swapped suppliers last year, but millions more, particularly the elderly, have never switched and are stuck on expensive standard tariffs.

Rob Salter-Church, interim head of consumers and markets at Ofgem, said the automatic compensation would help protect consumers and ensure suppliers get switches right first time.

His comments were supported by Ron who said those who had switched from a variable rate tariff to a fixed rate deal would have saved around £376 a year.

Ron encouraged householders to shop around for the cheapest energy deal now as he said it was so easy and particularly as British Gas, Npower and EDF had all put up their prices in the last couple of months.

Firstly, people should enter the tariff and energy usage from their most recent bill on a price comparison website which will suggest the cheapest supplier.

But he warned that the lowest price may not always be the best after research by the consumer charity Citizens’ Advice found that the bottom 15 places for the worst customer service all went to small companies.

He advises people thinking of moving to a new small provider to then look at three areas.

“Beware of companies who ask you to pay up front for a better deal; they may not have a big enough cash reserve. Secondly, if the provider has a poor customer service record it may be struggling with rapid expansion. Finally, make sure the company gives both value for money and has a good trading record.”

If they are happy then people can organise the switch online and it should be completed within weeks with no interruption to supply.

Meanwhile, for those looking for even more freedom from rising electricity and heating costs, Ron recommends looking at renewable alternatives.

These include rooftop solar photovoltaic (PV) panels, which change energy from the sun into domestic electricity, and air source heat pumps, which work by absorbing heat from the atmosphere and converting this into power for the home.

For help and advice about green energy matters contact Ron on 01782 756995 or go to www.noreus.co.uk