There is no doubt in our minds, Edward Davey MP, the new Secretary of State for Energy and Climate Change (DECC) supports collective energy purchasing. We now have absolute proof of this having been invited to a working group on Collective Purchasing and Switching last week as well as a round table follow up event with Ed Davey and Greg Barker MP, Minister for Energy and Climate Change, on 27th March.
“I believe collective switching has great potential and welcome this approach from thePeoplesPower. Households could save on their energy bills, and energy companies have the chance to talk with potential customers on a grand scale.
I am calling on energy companies to engage with schemes like this, and consider their potential. We need the energy market to work for everyone, and this collaboration is an important early step.”
Edward Davey, Secretary of State for Energy and Climate Change (27/3/2012)
Ed Davey has been enthusiastic about collective purchasing for some time now and initiated work in this area when he was a minister at Department for Business, Innovation and Skills (BIS). DECC, Ofgem, Consumer Focus and BIS together with consumer organisations, representatives of local government, switching sites, energy suppliers and a range of other interested parties have all been working hard to make collective purchasing work for consumers and organisations that want to run them. (Last week’s meeting was the last of 3 working group meetings and proposals are being made ready – Its a shame we did not know about the previous meetings as the discussion was lively and extremely interesting).
There are 3 main outcomes:
1. Ed Davey has written an open letter to energy supply companies urging them to be open to collective switching.
Read the open letter to energy supply companies about collective switching (PDF file – opens in a new window)
2. Ofgem Guidance
Several organisations have asked Ofgem to provide further guidance on whether collective purchasing and switching breaches energy supply licence conditions.
The general view of Ofgem is that collective purchasing and switching does not breach the rules … but there will be more detailed guidance in the near future.
- its free
- no obligation
- no risk
thePeoplesPower think that should Ofgem rule that there are certain licence conditions that prevent collective switching to occur, then the relevant Ministers will enforce a prompt review of these regulations. We cannot believe that Ministers from DECC and BIS would not have been advised before now if there were significant barriers to collective switching.
3. Guidance for consumers and group switching organisations
DECC will produce factsheets for consumers and organisations thinking of running collective switches. These will cover the issues and things to look out for to ensure that consumers are protected and organisations understand their obligations.
thePeoplesPower will feed into that process. As a new start up Community Interest Company, thePeoplesPower has had first hand experience of a lot of these issues, and this has confirmed our belief that trust and transparency are vital to making collective switching work in the interests of consumers. This is why we have made our business model completely transparent to the consumer and set up as a not for profit. We are the first organisation in the eenrgy sector to voluntarily reveal our referral fees right from the start. (It’s free for households and just £2 from the energy companies, which will ultimately mean there is more scope for savings to be passed onto consumers). Find out about our values as a Community Interest Company.
The household energy market in the UK has a long history of grappling with mis-selling. Try an internet search for something like – UK energy company mis-selling – and read some of the many news items on this over the last few years.
It would be a tragedy if something like collective purchasing became a new way for unscrupulous people to scam money from the vulnerable.
We will post our ideas here on the kind of questions consumers should ask before they sign up to a collective purchasing scheme.
Martin Lewis, from moneysavingsexpert.com has just announced in his blog (opens in a new window) that he was called by Edward Davey to encourage him to set up an energy purchasing collective.
Obviously we think this is a great idea – its why we have set up thePeoplesPower.
Collective switching has caught on
On Tuesday Which? and 38 Degrees launched their Big switch campaign – with support for the concept from Eward Davey. (
Come on Mr. Davey support us too! Its taken a while but we now have support – thanks!)
Remember there is no problem in signing up to other collective energy purchasing sites as well and seeing who can secure you the deal that suits you best.
Our sole aim is to get you the cheapest gas and electricity. We offer a cheapest green electricity option too. We are a not-for-profit organisation, so you can be confident that all of our time and energy goes into making thePeoplesPower a success for you.