Customers deserve solutions that make a real difference

 

Last week I wrote to the Chair of the Competition and Markets Authority Roger Witcomb responding to its proposals to make the market work better. 

I am urging the industry to work with the CMA to implement demanding and fair proposals without delay

Let me explain why. 

When I first called for an independent inquiry into the energy market in 2011, it was because I knew many customers didn’t trust their gas and electricity suppliers to give them a fair deal. Five years on the Competition and Markets Authority has completed its review of the market. Making their remedies happen across the whole industry will be a challenge but we must succeed.

We need solutions that really make a difference for customers – that’s always been my overriding goal for this inquiry. I believed that the industry needed a thorough independent inquiry and benefits from robust and independent regulation from OFGEM.

I said in 2011 that we had nothing to hide and we relished the opportunity to clear the air for customers. The inquiry found that the wholesale market is competitive, and that customers aren’t harmed by companies that both generate and sell electricity. 

This is good news. In addition, it found that the Government’s Electricity Market Reform package, including Contracts for Difference, was a robust framework.

But there are still challenges to be met

The CMA has rightly focussed on putting the retail supply of energy to domestic and small business customers at the heart of the proposed remedies. What they have concluded is that too few customers are benefiting from the full power of the intense competition between suppliers. This is because they are not making an active choice of tariff or supplier.

Our goal has to be to engage more of these customers and put them in control, through purposeful competition that builds trust.

At EDF Energy, our aim is to offer the right service, the right price and the right low carbon products. We have done more than most, with close to half of our customers choosing their tariff compared with an average of around a third for our major competitors. I firmly believe that the industry needs to do more. 

We need to give customers the help they need to choose the best tariff

If we let the regulator make the decision for them, they’ll never feel truly in control.

They will miss out on the chance to use competition to their advantage.

All customers should be able to make simple and informed choices. Since 2011, digital technology has advanced so rapidly that it is transforming the way customers deal with their energy suppliers. As well as driving innovation and making us more efficient, it’s also putting customers in control – making it easier for them to switch, manage bills accurately and control energy consumption.

We need to be sure that the best digital tools are available and trusted by customers, like the most advanced smart meters so that they can take advantage of these big changes.

We do need to protect prepayment customers with a fair and sustainable price cap until they have these advanced smart meters. One suggestion from the CMA is that details of customers should be shared to allow competitors to make direct approaches to encourage switching. This is a good example of something well-intended which has to be made to work well for customers.

We have proposed an alternative approach to the setting up and management of a customer database, but if this idea does go ahead the regulator must make sure that customers’ personal data is protected and that nobody is bombarded with unwanted mail.

Customers deserve to be able to trust the industry wherever they deal with it and that includes the many price comparison websites

Today’s energy market contains large and small suppliers, plus price comparison sites and third party operators. All suppliers large and small should face the same package of remedies from the CMA. We welcome and want competition – but we also ask for fairness. At least one of the so-called small suppliers already has more than one million customers.

Customers deserve to be able to trust the industry wherever they deal with it and that includes the many price comparison websites.

Ultimately everyone benefits if they are effectively scrutinised and regulated – trust is a cornerstone of any business.

At  EDF Energy we have worked hard to consistently improve customer service

Trust also comes from getting the essentials right and making things simple for customers. The number one example is customer service. That means making it easy to deal with bills, payments, switching and to get problems fixed quickly whether by phone or online. 

In the past it has not been good enough – but at EDF Energy we have worked hard to consistently improve customer service and in fact we now top a number of league tables.  I would like customers to be able to judge suppliers on service and where they get their energy from, as well as price. Our industry also has to make big changes to address climate change – customers should be able to see how their suppliers measure up.

We will continue to work positively and constructively with the CMA to make the market better and to implement a demanding but fair package of improvement

EDF Energy strongly supports the overall direction of the remedies package the CMA has outlined. We will continue to work positively and constructively with the CMA to make the market better and to implement a demanding but fair package of improvements – and in my letter to Roger Witcomb,  I have publicly called on the whole industry to do the same without delay. 

It’s what customers deserve and it is in the long term interests of our industry not to miss this opportunity.  

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Comments

Jean-Claude LELONG
Excellent Vincent, as usual....
April 17, 2016 at 5:29pm
EDF Energy
Thank you Jean-Claude for taking the time to comment. Very much appreciated
April 21, 2016 at 11:50am
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