Ofgem has ordered Big Six supplier NPower to fully cooperate in the market regulator’s next collective switching trial, designed to help thousands of disengaged energy customers easily switch to cheaper tariffs.
The regulator was granted powers to oblige energy suppliers to participate in consumer engagement trials as a result of the 2016 Competition and Markets Authority’s investigation into the energy market, which identified more than 30 measures to increase competition.
Last month Ofgem issued NPower with formal direction requiring they allow 100,000 customers who had been on the most expensive default standard variable tariffs—costing, with typical use, £1,230/yr—for three or more years to take part in the switching trial to be held this winter.
However, NPower “has so far refused to fully comply” and permitted just 50,000 customers to participate, half of the regulator’s requirement. Ofgem is now issuing NPower with a provisional order to legally force their compliance.
Ofgem’s first switching trial, involving 50,000 households that had been with supplier Scottish Power for at least three years and an average of six, was a resounding success. Receiving personalised calculations of how much they could save by switching to a collectively-negotiated tariff at E.on made customers eight times more likely to change suppliers. In all, 11,000 customers switched, saving an average of £300 a year.
Mary Starks, Executive Director of Consumers and Markets at Ofgem, chided NPower for their noncompliance.
“While the price cap will tackle poor value default tariffs, consumers can still save money by switching to better deals. We are exploring ways to make that easier, including the simplified collective switch,” she said.
“Npower is denying customers the opportunity to take part in the next collective switch trial. It is disappointing that we are having to resort to legal action. This should send a clear message to all suppliers that they need to live up to their responsibilities to help all customers get a better energy deal,” she added.
An NPower spokesperson said the supplier was “committed to improving customer engagement” and was cooperating with the trial, which it claimed was now delayed by Ofgem requiring more customers.
“We have said to Ofgem that we’ll undertake a collective switch trial of 50,000 customers immediately and this is now unfortunately delayed,” the spokesperson said.
“We are disappointed that, at the final hour, we have not been able to agree some detailed points with Ofgem, including their request to undertake an even bigger trial of 100,000 customers. Npower will respond quickly to the action Ofgem has taken in order to allow us to move ahead with the trial as soon as possible.”
