Big six forced to compete in new energy auction

Suzie Neuwirth
CUSTOMERS are grouping together to switch energy suppliers in time for an auction of energy deals tomorrow, as part of a government-backed initiative to force the big six to compete on price.

The nationwide schemes are being managed by 77 local authorities, including 23 London boroughs.

“Switching is one of the best ways that people can force the big six to compete on price and take control of their energy bills, especially if communities club together to get the best deal,” said energy secretary Ed Davey.

Households can register until midnight tonight, with an energy auction to take place tomorrow, where suppliers will submit their offer prices.

A fierce public debate into energy prices has raged on since late September, when Labour leader Ed Miliband pledged to freeze bills if elected. Since then, five out of the big six suppliers have unveiled inflation-busting price hikes, with SSE’s 8.2 per cent increase the first to come into effect last Friday.

Firms blame the government’s green policies as a key driver for raising bills and a number of the big six bosses have pledged to lower prices if the levies are shifted into general taxation.

Energy UK, which represents the big six suppliers, declined to comment specifically on tomorrow’s auction but said: “Switching supplier can help customers match their needs with a provider or tariff. Collective switching allows a group to do the same and the numbers involved can make the deal attractive.”

But not everyone is convinced. Darren Braham, finance chief at independent energy supplier First Utility told City A.M. that he was sceptical that collective switching would be successful in creating cheaper deals.

Regulator Ofgem is launching a consultation later this month to analyse the transparency and trustworthiness of collective switching, as it is a relatively new activity in Britain.