First Utility has the power to grow

First Utility has the power to grow

After being named in The Sunday Times BDO Profit Track 100 table, Warwick-based First Utility is anticipating another bumper year ahead as independent providers continue to shake-up the energy market.

As the ‘Big Six’ energy giants continue to see more customers turn away from them to independent suppliers, First Utility is continuing to increase its market share as the energy sector undergoes a major shake-up.

More than six million domestic energy customers switched their accounts last year, a 15% increase on 2014, according to the latest figures from regulator Ofgem.

This is the highest number of switches since 2011 and more than 40% of them were to independent suppliers such as First Utility, which alone boasts more than 900,000 customers.

The change has been heavily influenced by regulator Ofgem consistently advising consumers that they could save hundreds of pounds by shopping around and looking for better deals.

Another major influencer has been the regulator referring the market to the Competition and Markets Authority (CMA) for a full inquiry, saying it is committed to working with the CMA to ensure the market "works better for all consumers."

And First Utility’s UK managing director, Ed Kamm, is a firm advocate of this. He told BQ: “The desire from households for something different has led to a rapid change in the way the market looks compared to 2011.

“Today, 15% of households in the UK are served by independent providers such as us. That is progress, but far too many consumers are still served by the incumbents and overpaying on the most expensive tariffs.

“We calculate it to be as much as £4.2bn overspent, £398m in the West Midlands region alone. The problem is that the people who shop around that are getting the best deals, those that don't are overpaying hugely and it’s this 'disengaged' group that we, as an industry, need to do more to reach.

“That’s why we continue to propose solutions to the Competition and Market’s Authority (CMA) investigation that force energy suppliers to take more responsibility for engaging customers and helping them get the best deals.

“We can't afford to shift the blame to the consumers – it’s the industry that has let them down - and we must make the most out of this once in a lifetime opportunity for market reform.”

While official figures show customer complaints to energy firms fell by almost a quarter last year to five million, consumer groups echo Kamm’s views saying this is still too high and suppliers have continued to face hefty penalties for failing to fulfil their service obligations.

Npower in particular revealed it lost more than 350,000 customer accounts in 2015 after an "extremely difficult" year of hefty financial losses and customer service failings.

Long-running problems with its IT billing system and poor complaints handling resulted in a £26m fine from regulator Ofgem in January.

Since the beginning of last year, Ofgem has also imposed penalties stretching into the millions of pounds on fellow Big Six companies E.ON, SSE, British Gas and Scottish Power.

In January, consumer group Which? also renewed its criticism of the Big Six for poor levels of customer service, which has boosted challenger companies breaking into the market.

The watchdog's survey of more than 8,900 people found three of the companies had below average customer satisfaction ratings while the other three were only just above average.

This has provided a greater opportunity for small businesses, as for the fifth year running, the best performers were challenger companies, with OVO Energy on 82%, followed by Good Energy with 81% and Ecotricity with 77%.

Which? executive director Richard Lloyd said at the time: "Once again the smaller energy suppliers are leading the way when it comes to customer satisfaction, leaving the Big Six providers in their wake."

Ofgem senior partner Rachel Fletcher praised the changes being made in the industry. She said: "It's encouraging to see switching levels at their highest level for four years.

"With more than 30 suppliers active in the energy market and hundreds of pounds of savings to be made, it's a great opportunity to shop around.

"Whether customer service, price or both is what's most important to you, remember you always have a choice.

"If your energy company isn't up to scratch, vote with your feet and walk away."