News story

PM Energy Summit

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

A summit with the 6 biggest power firms, consumer groups and regulator Ofgem.

Government, consumer groups, energy suppliers, and industry regulator Ofgem have today agreed a range of measures to help consumers save money on their gas and electricity bills, as well as discussing policy developments aimed at keeping household energy bills down.

Mr Cameron said:

We are making energy companies be competitive. They’re permanently being watched by Ofgem to make sure it is a competitive market, and we are making them make their energy available so that others can come in and provide customers with a good service. We’re also writing to millions of customers today to encourage them to shop around to get the cheapest possible deal they can for their energy. So this is about the government, about the Citizens Advice Bureau, about other organisations, all working together to help people to keep their energy bills down.

Measures agreed

Check, switch and insulate to save

There was agreement on the need for clear and transparent communications to make sure consumers know about the potential savings from checking on their energy deal, switching tariff and/or supplier, and insulating, and how people can take up these opportunities to save money this winter. Measures agreed included:

  • a shared website and campaign material giving consumer advice
  • customers seeking cheapest tariff advice will also be given advice on energy saving measures, and vice versa
  • Ofgem and Citizens Advice announced record funding from suppliers for this year’s Energy Best Deal campaign
  • Citizens Advice will coordinate a ‘Big Energy Week’ campaign in the New Year.

Winter call to action

Measures agreed included:

  • millions of households could save money just by changing their payment method with their existing supplier
  • suppliers will write urgently to eight million quarterly credit customers to tell them how they can save money by changing payment method

Better billing

Measures agreed included:

  • agreement to make sure energy bills show customers how to save money
  • this winter suppliers will place a cheaper tariff signpost message on the front page of bills, encouraging customers to call their supplier or visit a website to find out if they could be saving money on their energy bills
  • energy suppliers have also agreed to look at a potential web-based tool that would provide consumers with a personalised comparison with similar households in their area

Warmer homes

Far too many UK homes do not yet have adequate insulation. Energy efficiency measures can save money on energy bills but many householders have still not taken these measures, despite the fact that the ‘big 6’ energy suppliers, who supply 99 per cent of UK households, all offer free or cut price deals to install these.

Measures agreed included:

  • from December 2011, 4 million of the most vulnerable energy customers in Great Britain will receive letters to tell them they are eligible for free or heavily discounted insulation to their loft or cavity walls
  • the supplier-funded letters will be sent by government and direct consumers to a dedicated independent helpline, as part of the government programme to ensure an extra 3.5 million homes are properly insulated by the end of 2012
  • this initiative will save customers millions in reduced energy bills - encouraging just 1% of this group to both insulate their home and switch their supplier could save customers around £12 million

Smarter switching

According to Ofgem, only 15% of households switched gas supplier last year and 17% switched electricity supplier - down from 20% (gas) and 19% (electricity) in 2007, despite the fact that it is possible to save up to £200 from an annual dual fuel bill by shopping around for the lowest online rate.

Measures agreed included:

  • the time taken to switch supplier is to be limited to 3 weeks with implementation of the EU Third Energy Package this autumn
  • in addition, work is underway led by BIS as part of the government’s Midata programme to cut the hassle out of switching, with a next generation online method of checking and changing to the best deal
  • to facilitate this, energy companies have agreed to give consumers access to their data in electronic format as part of the government Midata programme