Energy Suppliers and you
In today’s Whiteboard Friday, our Energy Guru Guy Thompson explains how the relationship you have with your energy supplier works. Guy compares the main energy suppliers “The Big 6” with the small energy suppliers “The New Kids”.
“Hi there and Welcome to Whiteboard Fridays with MyUtilityGenius. Well, last week I threatened you with a chat about energy suppliers. Energy suppliers is a massive subject so we are going to try to break it down. So, we are starting with a macro-economic view and we thought: what a better way to represent the suppliers and take the big 6 to start with and represent them with Thomas the Tank Engine characters. Well Why? (you may think) The main reason for is that we try to give you a feel of what the Big 6 are good at? What the New Kids are good at? And what are the differences between them?
If we look at things from a very high 50,000 feet level, the Big 6 typically people are interested in them because they know about them, their brand is strong, they deal with all meter types (economy 7, gas. electricity, prepayment), they deal with all payment types as well (cash cheque, Direct Debit, prepayment again). They also have regulatory commitments so they are obliged to install insulation for the most needy, they obliged to provide things like Warm Front Discount. Due to their share scale, they have the resources necessary to service large number of customers which means a growing or a shrinking of customer base doesn’t impact them that much because if they get an extra 50,000 customers this month, what is that when you are already servicing 5 million people? It is very different when you are a small guy. It is the same with their energy services: they provide boiler care, they look at ways which you can insulate your house to reduce consumption within the home.
What however are the New Kids good at? They are much leaner businesses. They are leaner which makes them more efficient. What does it deliver? It tends to deliver better pricing. So their pricing is pretty good, they tend to know they to break into the market with unique propositions whether that’s Smart Metering, whether that’s Green, whether that’s online energy efficiency programmes. It is important to mention who the new guys are, because our belief is that the media don’t address them nearly enough. All they talk about is about the Big 6. I am not going to say anything bad about the Big 6 at all, what I am going to say is that you need to know about the other guys, so: First Utility, Flow, LoCo2, Spark, Co-operative Energy, Green Energy, Ecotricity, OVO, Utilita, iSupply Energy, Good Energy, Utility Warehouse… They are a large number of other players that you probably should consider.
Ultimately, the Big 6 resembles the large train companies. They can get you to Birmingham but they can’t get you from your house to the corner shop next to your house. There are suppliers for every time of customer and whatever your objectives are, there is a supplier who means them. It is important to consider every body in this market. When you strip everything away what they all selling you is untangible stuff. Gas is the same if it comes out of your pipe. It doesn’t matter if it comes from BG or Flow Energy… It is the same for electricity whether it comes from Utilita or EDF.
So moral of the story is: there are a lot of suppliers and you need to look at what they do because there is probably something that is going to help you and from a switching perspective any switch is likely to save you significant amount of money. Next time we will look at more closely, why considering there is a lot of money to be saved on the switching market, switching rates are so low… Till then, I see you later.”