Monday February 6, 2006
Published on Guardian Unlimited
With British Gas customers facing a price hike of up to 25% and other energy providers likely to announce similar increases, it's a good time to make sure you are getting the best deal from your gas and electricity suppliers. If you're not, it could be time to change. We explain how to go about it.
Why change gas and electricity suppliers?
To save money. When competition was introduced into the energy industry in the early 1990s, lots of companies offering cheaper gas and electricity appeared.
Since then there has been some consolidation, but there are still over 20 "brands" including British Gas, London Energy, Scottish Power, npower and North Wales Gas. Ultimately all these brands are owned by just six companies, but competition between suppliers still exists, which means consumers need to shop around if they want to be sure they are getting the best deal.
How easy is it to switch?
According to the Department of Trade and Industry (DTI), most people in the UK think switching is going to be difficult, but of those who have changed suppliers, 90% found the process easy.
Most people start by using a website to compare prices. The idea is simple: you enter your postcode and how much you pay for gas and electricity and the website generates a list of suppliers in your area with the savings that they promise. You can then click through and sign up with a new, cheaper supplier immediately. You can buy your gas and electricity separately, or you can choose a "dual-fuel" option, where both are supplied by the one company.
A word of warning though, many of these price-comparison websites make money on each new customer they refer to the power companies, and this commission is not always transparent.
You can sidestep the commercial websites by using the price-comparison calculator at www.energywatch.org.uk, the UK's independent gas and electricity watchdog. This site also has a list of other price-comparison websites that it approves, so it is a good place to start your research. Guardian Unlimited also has a gas and electricity calculator where you can compare costs.
You also need to bear in mind that you are comparing today's prices, as the sites do not take into account any proposed price rises, even if they have already been announced to customers. Energywatch also has details of any changes that are in the pipeline, so do some research before you commit.
How much can I save?
It depends on how much power you use and where you live. For example, a household in London with an annual energy bill of £600 made up of £300 from British Gas and £300 from London Electricity could, according to Energywatch, save up to £129 a year if the accounts were switched to a dual-fuel account with Telecom Plus. Which? estimates most households can save £100 a year by switching.
What else should I look out for?
You can save money by changing the way you pay. Direct debit is usually the cheapest option and a prepayment meter is usually the most expensive. Many suppliers have special tariffs and reward schemes including reward and cashback schemes. Some suppliers may offer you incentives to change to them or airmiles for staying with them. As well as the incentives, look out for tariffs for older people, online tariffs, green tariffs and prompt payment tariffs.
How do I switch?
Most of the energy websites tell you the process is quick and painless. It's not, as it involves filling in forms which most of us find a bit of a chore, but don't be put off.
Most of the details you will need to arrange a switch will be information you have already used to compare prices, for example:
· Who your current energy supplier is
· What your annual bill is for gas and electricity, or an estimate
· What your tariff is and how you pay your bill
To sign up with the new supplier you will need:
· Your electricity supply meter point administration number (MPNA) and your gas supply meter point reference number (MPR). Both of these are unique to your property and should be on your bill, otherwise you will need to call your current supplier
· Your bank details
All the necessary information - with the exception of your bank details - should be on your latest bill.
The form will be a five or six stage process, at the end of which you will have signed a contract with your new supplier.
What happens after that?
Once you have signed up with a new supplier the transfer process begins. This should take about six weeks. Your new supplier will keep you informed of how things are progressing.
You need to give your old supplier at least 28 days' notice that you are switching. Energywatch advises you phone first and follow up with a letter. You also need to pay the outstanding bill - if you don't, or if there is even a few pence left to pay, your old supplier may prevent you from switching. Finally, on the day you switch, you should take a meter reading and make sure your new supplier uses this as its starting point.
What happens if something goes wrong?
The most likely sticking point is your old supplier refusing to let the switch take place because of an unpaid account, so make sure your account is fully paid up.
Another danger is the "erroneous transfer". This is jargon for being conned into switching, often by a high-pressure, commission-driven salesperson.
Immediately after deregulation the industry used door-to-door sales tactics which saw salespeople forging signatures and signing up households without their consent. In one notorious case, a salesman signed up 43 people without their say so. This led to the 2001 Erroneous Transfer Customer Charter, which promises complaints like this will be dealt with swiftly, and that the customer will be transfered back to their original supplier within a guaranteed 20 days at no cost.
If you do encounter problems, you must first contact your supplier and follow its complaints procedure. If you get nowhere, you can ask Energywatch to look into it. You can do this via its website.
How else can I cut my bill?
The easiest way to cut your utility bills is to be energy efficient. Don't leave appliances on standby, switch off lights, use energy efficient lighbulbs (each one saves £10 a year on average), insulate your home and replace your old boiler. All this could save you £200 a year according to Energywatch. Further tips are available from the Energy Saving Trust.
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