Co-Operative Group Launches Gas & Electricity Service
In an attempt to shake up the energy market the Co-Operative Group has launched its own gas and electricity service.
The Co-Op has moved into the gas and electricity market by launching its own service. The chief executive wants to turn the “big six” into the “big seven”.
The chief executive, Nigel Mason, said the Co-Op believes it will be able to provide a better service than that currently being offered by the so called “big six” of E.ON, EDF, RWE npower, Scottish Power and Scottish & Southern Energy.
The Co-Op has said it will offer a simple, single tariff, called the Pioneer tariff, to make it easier for customers to understand. The company also said there would be no fixed price contracts so people wouldn’t be locked into long deals and customers won’t be penalised for moving to another supplier.
The Co-Op has also said that new customers won’t get and preferential treatment such as better tariffs than existing customers. The company will also try to ensure that electricity provided by them is as green as possible. They will use wind and hydro power and the company plans for its carbon content of electricity to be less than half the national average by April of next year.
The Co-Op also hopes to be able to provide a business gas and business electricity service before the end of this year. This will be good for businesses as business electricity prices and business gas prices have increased this year so another energy supplier should help to increase competition within the business energy sector.
The arrival of a new supplier on the market will be welcomed by Ofgem, the energy regulator, which carried out a review in March and concluded that companies had been profiteering by increasing bills quickly and taking their time to lower them when gas and electricity prices dropped. Ofgem also said that the major utility providers curbed competition because of their dominance and as a result customers received poor customer service and there was a lack of openness around them.
Mr Mason said “It’s something we’ve been looking at for a long time,” he said. “The Co-op tends to do these things thoroughly. We obviously thought the energy market wasn’t working efficiently for consumers, which is something Ofgem had been delving into deeply and coming up with more remedies”. He added “If the effect of our entry is improving the market that’s a good thing. We’re in this for business reasons but the Co-op can have a campaigning role as well as we’re owned by our members. We’d like to be part of the big seven some time in the future”.
The consumer watchdog, Consumer Focus has welcomed the arrival of the Co-Op into the energy market. The head of Consumer Focus, Audrey Gallacher said “We’re glad to see a new player enter this market that has long been dominated by only the big six firms. Co-operative Energy is making some welcome promises. We hope the firm will live up to its commitment to give its customers a fair deal”.