British Gas head admits company is facing 'crisis of trust'

Phil Bentley, the managing director, said in an email that British Gas workers on the road and in call centres were facing increased levels of anger from customers.

In his message to employees, Mr Bentley, who is paid £1.3 million-a-year, wrote: "We have seen a groundswell of anti-BG comments, with increasingly aggressive tones. All our call centres are under extreme pressure from more angry customers struggling to pay bills."

The email has emerged days after British Gas refused to pass on the fall in the wholesale price of gas to its 9.2 million customers.

Mr Bentley also admitted that employees have "a tough gig", adding: "We are facing a crisis of trust." In his email, which was meant to boost morale, Mr Bentley said he was "relieved" that he did not have a swimming pool at his £1.8 million Twickenham home after the chief executive of E.On, the energy company, was criticised for installing one at his £2.5 million property.

"The E.On CEO is under attack for building a new swimming pool (I'm relieved I haven't got one!)," said Mr Bentley. He added: "There is no doubt in my mind that the energy industry is facing a crisis – a crisis of affordability; a crisis of investor confidence; a crisis of relentless media criticism – in short, a 'crisis of trust'.

"All our call centres are under extreme pressure from more angry customers struggling to pay their bills, and the vicious spiral of call-waiting times that have shot up in services and energy, is causing even more customer anger."

Despite attacking the media for "running a campaign against the energy companies", Mr Bentley admitted that British Gas must take action over the deals the company offers. "We've got to start doing things differently so that customers, and our colleagues, can see a marked difference," he said.

Mr Bentley added: "We have a number of initiatives planned over the forthcoming months – better deals, simpler tariffs, bills that are easier to understand and more transparency – all of which are designed to rebuild that customer trust." British Gas refused to comment on the leaked email.

Four out of 10 people are worried that they cannot afford their next energy bill, according to research. Citizens Advice, the charity which commissioned the report, also reported that one in two people said energy bills will put a strain on their finances this year. One person in three does not know that energy companies are offering support to insulate homes, the charity said.

27/01/2011 - telegraph.co.uk
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Npower follows rivals with 5% cut to gas prices

Npower has become the latest energy firm to cut customer bills, announcing it will reduce gas prices by 5% from 1 February.


The firm, which will introduce its reduction before other companies, will also waive the exit fees on its fixed tariffs so customers who want to switch to its standard tariff can do so.

Npower is the fourth of the "big six" energy firms to announce a price cut, with EDF Energy and Scottish & Southern Electricity both announcing similar reductions in gas prices, and British Gas announcing a 5% cut in electrity prices. Npower's price cut will save its average dual fuel customer £39 a year.

Paul Massara, chief commercial officer at RWE npower, said: "It's obviously no coincidence that several energy companies have announced price reductions this week, and we do not apologise for joining them.


"We are now at a point where costs, at least in the short term, can justify a price cut and we want to make sure that npower customers always get competitive deals."


Massara said the price reduction would mean npower's average dual fuel customer would pay less than someone with British Gas. It will also waive exit penalties on its fixed energy tariffs for two months, allowing customers on high cost deals to switch free of charge.

Clare Francis of price comparison website Moneysupermarket said: "Customers should weigh up whether they are on the best value deal for the area they live in and the amount of energy they use. In some cases the fixed deals customers are already on may still be the best option."

She added: "All eyes will now be focused on E.ON and Scottish Power. They have yet to make any announcement on whether they will be cutting the cost of energy for customers, and pass on the recent falls to the cost of wholesale energy."


Adam Scorer, director of policy and external affairs at Consumer Focus, said cuts from four energy firms in three days were "a good sign" that energy companies understood that consumers expected them to respond to falling wholesale costs.


But he added: "These cuts will not compensate for the big rises in 2011, they will not transform the energy market, or significantly lessen the burden on hard pressed consumers.


"If companies are more prepared to cut prices quickly when wholesale markets allow, if they fully embrace Ofgem's market reforms and they mean what they say about earning consumer trust, then the rehabilitation of energy companies may be possible. But there's a long road to travel first."

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British Gas turn-off as 200,000 quit and profits fall by 23%

British Gas will announce a 23 per cent fall in profits after 200,000 customers turned their back on the giant in just four months.

The firm revealed 1,800 people a day have been leaving in protest at 17.3 per cent price hikes.

The mass exodus between July and November last year reduced its number of customers from 16.1 million to 15.9 million.

Hundreds of thousands are walking out on the "big six" suppliers and moving to smaller, cheaper companies.

They are angry large falls in the price of wholesale energy are not being passed on and are switching to firms such as First Utility and Ovo Energy.

Research by comparison website uSwitch.com found the numbers moving has risen tenfold since August when prices went up by 19 per cent, pushing up average bills to £1,322 a year.

Experts say bills could be cut by £135 if wholesale savings were passed on. Mark Todd, of Energyhelpline.com, said: "The tide seems to be turning."

British Gas is expected to announce £566million profit for 2011, compared with a record £742m in 2010.

Since peaking last summer, wholesale gas prices have plunged by 31% and electricity by 28%. But British Gas cut electricity bills by just 5% and didn't cut gas bills at all.

Rivals SSE, EDF, npower, Eon and Scottish Power have also cut bills but some won't start till March and only save about £30 a year.

A British Gas spokesman said: "We work hard to give customers value for money."

22/01/2012 - Mirror.co.uk

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Scottish Power cuts gas bills by 5 per cent - but says 'prices will rise in the long-term'

Scottish Power has become the last of the 'big six' firms to announce a price cut by reducing its gas bills by 5 per cent from 27 February.

The reduction will affect 1.4million customers, knocking £36 off bills for duel fuel and gas only monthly direct debit customers. 

The firm said that it has been able to make the cuts due to recent falls in wholesale costs, but that in the long term prices will rise.

Energy firms buy and sell gas and power on the wholesale market, typically in advance to secure the amount of energy they think they will need to supply to
customers. Neil Clitheroe, ScottishPower’s chief executive officer of energy retail and generation, said: 'We have already secured the majority of our energy requirements for this winter. It is important that we do this to ensure we have sufficient supplies when our customers need them and to protect customers from the impact of volatile movements in the wholesale energy market.

'Although there has been a short-term fluctuation in the wholesale gas market that has allowed us to pass on today’s reductions, the global demand for energy is increasing faster than its supply. This will inevitably lead to higher energy costs in the long-term.'

The firm joins EDF Energy, British Gas, npower, Scottish and Southern Energy (SSE) and E.ON, who have all announced a price reductions due to a recent fall in wholesale costs, but this month's round of cuts are nowhere near the rises implemented by the energy giants in the autumn. Yesterday E.ON announced a 6 per cent cut to its electricity prices affecting 3.7million customers.

Last week npower cut its gas price by 5 per cent, while British Gas shaved 5 per cent off its electricity prices and SSE announced a 3.8 per cent reduction to gas bills.

Two weeks ago EDF Energy was the first firm to announce a price cut, wiping 5 per cent off gas bills for 1.4million of its 3.8million customers.

Scottish Power also promised to not increase standard prices for gas and electricity over the winter months, until at least 1 April this year. Ann Robinson, director of consumer policy at uSwitch.com, said: 'The fact is that these cuts will not even come close to wiping out last year’s eye watering price hikes and even if there is a further cut later this year they are still unlikely to do so.'

17/01/2012 - dailymail.co.uk

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British Gas cuts electricity prices but keeps gas on hold

Up to 9 million households will see their energy bills fall after two of the UK largest providers announced price cuts.

More than 5 million British Gas customers will see their electricity bills fall by 5% after the energy provider announced it was cutting its standard tariff with immediate effect. The move was followed swiftly by Scottish & Southern Electricity (SSE), which said it would reduce gas bills by 4.5% with effect from 26 March.

British Gas said 5.3 million dual fuel and single energy customers would benefit from the reduction in electricity prices, with an average saving of £24 a year, and the cut would make its standard electricity tariff the cheapest in Britain.

Meanwhile, SSE said 3.5 million households would see an average price cut of £28 a year when it reduced gas prices for dual fuel and single energy customers.

However, the cuts were smaller than expected and households who buy their gas from British Gas or electricity from SSE will not see those bills cut. The average standard tariff for a dual fuel customer with both firms will remain above £1,200.

British Gas said it bought the majority of its gas supplies in advance, and "while there have been some short-term falls in the cost, the longer-term trend continues to be upward". It said prices in the wholesale market for gas to be delivered at the end of 2012 had increased by 14% since the end of 2011.

The energy firm had been expected to cut prices after another of the 'big six' energy providers, EDF Energy, announced it would be reducing gas prices by 5% with effect from 7 February, but analysts had expected customers to benefit from a bigger reduction.

In 2011, British Gas was the second energy company to increase costs for consumers, raising gas and electricity prices by 18% and 16% respectively, and its price rises were larger than EDF's.

Commenting on the price cut Ian Peters, managing director of energy at British Gas, said: "We want to keep prices as low as possible for our customers. Household budgets are stretched and we are doing everything we can to help our customers keep their bills down.

"This price reduction means British Gas is once again offering the cheapest standard electricity, on average, of any major supplier."

However, the company warned that any reductions in energy bills may be short lived. It told customers: "It it is too early to say exactly what will happen to energy prices. Energy bills include a number of costs, many of which are increasing."

SSE said recent falls in the wholesale price of gas had allowed it to reduce prices for consumers, but the way it bought energy meant this could not come into effect until March.

It said electricity prices had not come down, but it would extend a promise not to increase bills before August 2012 to October 2012, and would implement more price cuts if possible.

It will also launch a three-year fixed price option for electricity and gas customers, with a premium of 4% on standard prices for those who want to protect themselves against any future rises.

Alistair Phillips-Davies, generation and supply director of SSE, said: "The cut in household gas bills shows customers that we will bring down prices when we can, and our decision to extend to October our pledge not to increase prices will give our customers some additional certainty about the costs they will face in the course of this new year."

Responding to British Gas's price cut, Adam Scorer, director of policy and external affairs at Consumer Focus, said while consumers would welcome price cuts, companies needed to narrow the widening gap between wholesale and domestic energy prices.

"While companies will respond differently depending on where they think wholesale prices are heading, wholesale gas and electricity prices have been falling over the last year – this narrowing of costs must be reflected in consumer prices," he said.

"The widening gap between wholesale and retail prices has become the fault line for consumer confidence. Companies want to regain the trust of their customers – narrowing this gap is a necessary part of achieving this."

Clare Francis of price comparison website Moneysupermarket said British Gas customers would be "confused as to why British Gas is saying it isn't in a position to reduce the cost of gas as well".

"At a time when energy companies are trying to improve transparency and openness in the industry, these conflicting messages are not helping to rebuild trust," she said.

12/01/2012 - guardian.co.uk

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E.ON and ScottishPower complete Big Six price cuts

E.ON said it would cut electricity prices by 6pc, while ScottishPower chose to cut gas prices by 5pc. Both changes are due to come into effect at the end of February.

The moves followed a 5pc electricity price cut by British Gas, and cuts to gas prices of 5pc by EDF Energy and npower, and of 4.5pc by SSE.

The suppliers have come under mounting pressure to pass on the savings from falling wholesale prices.

E.ON said its decision would benefit 3.7m of its 4.5m electricity customers and would equate to a £31 reduction on an average annual bill. The 6pc electricity price cut compares with an 11.4pc increase E.ON implemented in September.

E.ON made no reduction in its prices for gas, which it increased by 18.1pc last year.

The company supplies around 3m households with gas and said it had chosen to cut the fuel for which it had most customers.

Dr Tony Cocker, E.ON UK chief executive, said: "Reductions over the last few months in the wholesale price that we pay for our customers' energy have now allowed us to help as many of our customers as possible by cutting our electricity price."

ScottishPower said its gas price cut would affect around 1.4m customers, saving those dual fuel customers on direct debit around £36 a year. It did not reduce electricity prices.

The company increased gas prices by 19pc and electricity prices by 10pc last year.

Adam Scorer, policy director at Consumer Focus, welcomed the price cuts but warned that customers would "still be paying a lot more for their energy than they were a year ago".

16/01/2012 - Telegraph.co.uk

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Angry customers are abusing staff over rising prices, admits boss of British Gas

Angry British Gas customers infuriated by rising energy bills are deluging its staff with increasingly aggressive complaints, the company’s boss has admitted.

Managing director Phil Bentley – who earns £1.3million a year – revealed that customers struggling to pay gas and electricity bills are taking out their frustrations on his call centre staff and workers on the road.

The company boss said in a candid email to staff: ‘We have seen a groundswell of anti-British Gas comments, with increasingly aggressive tones.

All our call centres are under extreme pressure from more angry customers struggling to pay bills.’
The high number of complaints comes as British Gas continues to refuse to pass on the fall in the wholesale price of gas to its 9.2million gas customers.
According to industry estimates, the wholesale price of gas has fallen 9.4 per cent.

Yet, British Gas has only reduced the cost of electricity by five per cent and have not made any reduction in the price of gas despite other companies doing so.

In the same email, which was supposed to boost staff morale, Mr Bentley also admits that employees have ‘a tough gig’ and British Gas has lost its customers’ trust.
He blames the media for exaggerating the price rises and enraging customers who then vent their anger at staff in British Gas call centres - which are all based in the UK.
He adds: ‘There is no doubt in my mind that the energy industry is facing a crisis - a crisis of affordability; a crisis of investor confidence; a crisis of relentless media criticism - in short, a “crisis of trust”.’

He also says he is ‘glad’ he doesn’t have a swimming pool at his £1.8m Twickenham home – a reference to a competitor who recently had a heated poolhouse (CORR – not swimming pool) installed at his house as energy costs rose.
Last week, it was revealed that the ‘big six’ energy companies, which includes British Gas, received four million complaints last year, mostly concerning mistakes on bills and inaccurate meter readings.
The research, by Which?, also showed that nine in ten customers who were unhappy with the way their complaint was dealt with did not take it to the energy ombudsman.
As a result, the consumer group estimated that these people lost out on as much as £4million-a-year in compensation.
Richard Lloyd, Which? executive director, called for energy firms to be more transparent about the number of complaints they receive.
He said: ‘Ofgem, the energy regulator, should publish the truth about the full level of complaints in this essential service.
‘Energy suppliers should be held publicly accountable, on a regular basis, for putting right the problems their customers are reporting.
‘It is a sign of the level of frustration with this industry that so many people have a problem but don’t complain, even when they could be missing out on compensation.’

Gary Smith, of the GMB union which represents many British Gas staff, said: ‘The problem is getting worse. The staff on the front line bear the brunt and it takes an emotional toll. People should remember that these workers are human beings.’

A spokesman for British Gas refused to comment, but did not deny that the email was genuine.16/01/2012 - dailymail.co.uk

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Ovo energy price cut throws down gauntlet to 'big six'

Energy company Ovo has announced it is reducing the price of its fixed dual fuel tariff by 5%, shaving about £55 off the average household's annual bills.

The cut, which follows the company's decision not to take part in the last round of energy price rises, is in response to recent falls in wholesale energy costs and puts the spotlight on other gas and electricity providers.

Ovo said that from 6 January it would charge 4.94% less for its New Energy fixed tariff, meaning the average UK household would face a bill of £1,061 a year.

The price cut is not, however, available to customers who are already locked into a fixed contract with Ovo – they must wait until that deal ends before they can make the switch.

Stephen Fitzpatrick, Ovo Energy's managing director, said: "Due to a recent decrease in wholesale costs we are able to respond and pass on these savings to consumers, thereby giving them a cheaper and simpler alternative to the 'big six'.

"January is always a challenging month for everyone's bank balances, so we are delighted to do what we can to help make paying for energy a little easier."

Audrey Gallacher, director of energy at Consumer Focus, said cuts would be welcomed by consumers dealing with a 14% increase in energy bills since summer 2011.

Gallacher said: "This is a market fundamental which must be reflected across the sector if wholesale costs continue to fall. The gap between wholesale and retail prices remains a fault line for consumer confidence in the energy market. The further the wholesale price falls, the greater will be the clamour for others to follow Ovo's lead." 

Ovo's price cut follows a 3% decrease from Co-operative Energy announced in December.

Price comparison site uSwitch said Ovo's New Energy deal was now the second cheapest tariff on the market after First:Utility's iSave Dual Fuel V9, and offered a saving of £66 a year on average over the big six suppliers.

Tom Lyon, energy expert at uSwitch, said: "This is the kind of consumer friendly move we have come to expect from Ovo. In one fell swoop it has given cash-strapped consumers a lending hand, become the second cheapest energy supplier on the market and laid the gauntlet down to the big six suppliers."

He added: "The move is another reminder why smaller players are so welcome in the market: they are nimble enough to be able to turn price cuts around far more quickly than the bigger players, making them a good consumer friendly alternative."

06/01/2012 - Guardian.co.uk

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Are energy prices on their way down? EDF finally bows to criticism and announces 5% cut in gas prices

Energy giants were yesterday urged to slash tariffs after one of the ‘big six’ broke ranks and cut the price it charges for gas by 5 per cent.

The move by EDF will offer some respite to 1.4million of its customers when it takes effect on February 7.
However it reverses only a small part of an increase of 15 per cent imposed in November.

And it is less than consumer groups wanted after a 9.2 per cent fall in the wholesale price of gas as demand has slumped over the mild winter.

Edf increased its gas bills by 15.4 per cent that month - but has now made the 5 per cent cut after a 9.2 per cent fall in the one-year wholesale gas price.

The company said an average dual fuel bill customer with typical consumption paying by monthly direct debit will face a bill of £1,137 a year.
The cost will be higher for EDF customers who have not switched to payment by direct debit.

It follows speculation over the weekend that British Gas owner Centrica was considering a 10 per cent reduction in household energy bills.

Energy firms have been accused of being quick to pass on increases in wholesale prices, but dragging their feet when prices come down.

Adam Scorer, of customer body Consumer Focus, said the EDF announcement – on the day it emerged that the ‘big six’ generated more than four million customer complaints last year – was ‘overdue’.
He added: ‘It is now up to the rest of the ‘‘big six’’ to compete and consumers will expect to see prices come down across the board.’

Richard Lloyd of Which?, the consumer group which compiled the figures on customer complaints, said: ‘The pressure is on for the rest of the major suppliers to follow suit.’

Energy Secretary Chris Huhne said: ‘Some big energy suppliers were quick to pass on rising costs last year, and it is only right that they should now pass on cost reductions to hard-pressed householders as quickly as possible.’

The planned cut by EDF will save its gas customers around £38 a year on average.
But those who take both gas and electricity from the firm and pay by monthly direct debit still face an average annual energy bill of £1,129.

EDF said it deserved credit for being the last of the big suppliers – the others are British Gas, Scottish & Southern Energy, Npower, E.ON and Scottish Power – to raise prices ahead of the winter and the first to make a cut in 2012.

The firm made its move after recent market entrant Ovo Energy lowered both its gas and electricity prices last week.

It cut its dual-fuel fixed-tariff prices by 5 per cent for new customers and existing Ovo customers who are due to renew with the supplier.

It will raise expectations that the remaining of the 'Big Six' suppliers - British Gas, Scottish & Southern Energy, Scottish Power, E.On and nPower - will follow suit and cut bills.

Co-operative Energy, which has attracted more than 16,000 customers since its launch in May, last month said it would reduce its gas and electricity charges for most customers by an average 3 per cent from February 1, a saving of around £35 per year for the typical household.
But the price cuts are unlikely to halt criticism of energy suppliers.


The Big Six moved en masse in the autumn to raise prices, and any price cuts announced now will only kick in from February at the earliest, meaning that households will spend the bulk of the winter, when fuel consumption is at its highest, on more expensive tariffs.

EDF's 15.4 per cent price hike in November came despite the fact that wholesale gas prices were already falling and have dropped 32 per cent since September, according to ICIS Heren.
The wholesale price - what the supplier pays for gas - makes up around half the cost of bills, EDF said.

An EDF spokesman added: 'We were the last of the major suppliers to raise prices in November and we are the first to lower them now. You have to remember that we held off raising prices as wholesale costs rose.
'This is the second winter that we have been the cheapest supplier for standard tariffs.'

Suppliers have been under increased pressure from the Government and regulator Ofgem over their pricing.

In December, Ofgem said the average profit generated per customer by the industry stood at £105, having peaked at £125 in October following a round of price hikes.
The margin figure had been £15 in June.

Energy Secretary Chris Huhne said: 'Households have faced real difficulties this winter after last year's global gas prices pushed up bills.

'The situation is now changing, with the cost of gas imports falling, and I welcome that EDF have today responded, joining small suppliers Coop and Ovo by cutting domestic gas bills.

'Some big energy suppliers were quick to pass on rising costs last year, and it is only right that they should now pass on cost reductions to hard-pressed householders as quickly as possible.

'I urge the remaining five large energy suppliers to follow suit and give consumers some respite this winter.

'If suppliers do not reduce prices, consumers can send them a clear message by voting with their feet and taking their business elsewhere.'

EDF chief executive Vincent de Rivaz said: 'What customers want more than anything else is fair, clear and transparent prices.

'We know they want action rather than words. That is why we are the first major supplier to announce a cut and were the last to increase prices.'

The move comes on the day that an annual energy company satisfaction survey carried out by Which? showed that EDF finished second bottom in a table of the biggest six energy suppliers.

Only 43 per cent of its customers said they were satisfied with the company's service or likely to recommend it to others.The result comes after the introduction of a new billing system led to a surge in complaints from customers.

Richard Lloyd, Which? executive director said: 'This gas price cut will be welcome news for millions of consumers with already squeezed household budgets. But it follows a hike of 15 per cent last November.
'Now the pressure is on for the rest of the major suppliers to follow suit. But as our survey today shows, there remain huge problems with customer service in energy as well as high prices.'

Mark Todd, director of the independent price comparison service Energyhelpline.com, said: 'The (EDF) reduction is less than expected but it is quicker and for that millions of homeowners concerned about winter bills will be relieved.
'In one fell swoop, the company has stolen a march on its opposition and grabbed some positive headlines for the energy industry.

'However, bearing in mind that wholesale gas prices have plummeted 32 per cent since early September, this price cut is at the lower end of expectations.'

'It is important to point out that a 5 per cent reduction means just £36 off an annual dual fuel bill for customers on the standard tariff paying by monthly direct debit - from £1,165 to £1,129 – or roughly £38 from £1,240 to £1,202 for those paying it quarterly.'

12/01/2012 - dailymail.co.uk

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British Gas set to cut energy prices

After a wave of inflation-busting price hikes, fed-up householders may be in for a bit of good news at last with a drop in energy bills.

British Gas could be the first of the big suppliers to announce a cut over the next few weeks.

Although nothing has been decided, it is believed bills for its 16 million customers could come down by around 6%, saving a typical household nearly £80 a year.

Suppliers are under ­pressure to drop bills after a slump in wholesale costs of gas and electricity. Consumer Focus’ Adam Scorer said: “When wholesale prices were on the rise energy firms were clear on the need for this to be passed to customers – and this must also be demonstrated as prices begin to fall.”

British Gas yesterday refused to comment but consumers will be hoping other energy outfits follow suit if it does cut bills. The firm increased its gas prices by 18% and electricity by 16% last August, a rise which sparked an exodus of more than 200,000 customers. Passing on wholesale savings is a key demand in the Mirror’s Fair Price for Power campaign.

We are also calling for a Competition Commission probe into the ­dominance of the Big Six suppliers – British Gas, npower, E.ON, SSE, Scottish Power and EDF Energy.

Two smaller firms, Ovo Energy and Co-operative Energy, have already announced cuts in prices.

07/01/2012 - mirror.co.uk

UK Gas and electricity prices could fall due to mild winter

The mild winter could see a dramatic fall of up to ten per cent in the cost of gas and electricity to the UK consumer.

The big six utility suppliers overstocked on gas believing that the winter would be a lot colder than it has been, as it was in the last two winters. This means that the wholesale cost of gas has fallen by as much as 25 per cent.

Two smaller players in the energy market have announced reductions in tariffs,
The Co-operative announced a three per cent fall to take effect from February and this week OVO announced a five per cent drop in dual fuel tariffs for new and existing customers to take effect immediately.

It is hoped that the bigger energy companies will be forced to drop their prices to avoid losing customers to these smaller players in the utility market.
This has ramped up the pressure for the big six energy suppliers to follow suit.

Industry experts and consumer watchdog groups say that British Gas, who supply energy to 16 million UK homes can afford to cut retail prices by as much as ten per cent.

The energy companies have come in for strong criticism by customers and consumer groups alike and have been quick to pass on higher wholesale costs to customers. Now that the wholesale cost has come down it remains to be seen if they will be as quick to reduce prices as they were to raise them.

A spokesman for Centrica, parent company of British Gas said: “Clearly we need to remain competitive and we have to heed the market place.”
Energy watchdog Ofgem said: “The big suppliers have a responsibility to pass on savings.”

07/01/2012 - myfinances.co.uk

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