Tuesday 27 April 2010

Who do you buy your energy from?

I have never quite got my head round the supposed effects of de-regulation of energy and utilities supply, where the energy or service that is being delivered to you by one company can actually be 'bought' from another company - and not just from one other company but from at least 20 companies, judging by the number that come up on one of those utility switching sites. I can see why competition for the supply of some services is a good thing and in theory brings down prices but I also think that de-regulation or privatisation in this field is as much about ideology as about value, and that companies must have to increase their prices to pay for the costs of competing. But given that, with gas and electricity, it is the same stuff coming down the same pipe, and this can only be delivered to you by one company in any case, it does seem a bit crazy that you can buy this same stuff from such a supposed range of sources. Cutting your path through the jungle not just of 20 or 30 companies but for each company maybe 10 different pricing options (single fuel, duel fuel, direct debit, monthly payments, on-line only, fixed price, etc etc) makes you long to live in the People's Republic of China - or at least just stick with the companies you have been buying it from for the last 30 years.

Given the number of companies out there trying to flog you energy, and the existence of the switching sites to give you information about these companies, you would have thought your existing supplier would be making a bit more effort to convince you that they were the best for you and that you were on the best deal that they could offer (even the banks can manage to do that). Have I had one approach like this from Scottish Gas or Scottish Power? Not a tweet. And it was only when a man from Scottish Hydro-Electric knocked on the door and could demonstrate that I was paying Scottish Gas (actually British Gas or more correctly the multin-national Centrica) and Scottish Power (now owned by the Spanish company Iberdrola) a lot more than I would be paying Scottish Hydro-Electric that I thought the time had come to find out a bit more.

To cut short a long story of ridiculous amounts of time spent trying to compare offers and prices that are hard to compare, as from 1 April I ended up switching both gas and fuel supplies to Scottish Hydro Electric (part of the Scottish and Southern Energy Group but still a UK company with its headquarters in Scotland). For what reasons? One, by my own calculations and by those of the switching sites I should be paying less for the same thing. Two, they had bothered to try and help me save money. Three, they were a UK/Scottish company. Four, although the old hydro tag is a good one with which to back up your green credentials, they convinced me that they were as keen on developing more renewable energy as any of the other companies. None of the companies seem very convincing about their claims that they will help you reduce your energy use which is not surprising as they are in the business of selling you energy. Why did I not go for a 'Green Energy' company? Mainly because, given the choice, I was not prepared to pay what seemed to be a hefty premium for being assured that they bought x% of their energy from renewable sources, and also because I could not get it out of my mind that it was still going to be the same energy coming down those pipes to my house, regardless of who I 'bought' it from.

Once you have opted for a new supplier, gosh do your existing ones not half get on the phone to make all sorts of claims and offer all sorts of deals and incentives for you to stay with them. I can't help feeling that a bit more regulation might not be a bad thing to simplify this area, and certainly that only more regulation will deliver the required increase in renewable energy - consumer demand alone is not going to achieve that.