Since moving to a fully remote operation, we’ve been able to maintain service at the usual levels. Indeed we’ve actually improved our phone answer times, and email response times have been fairly good too. Overall service levels have been about the same as pre Covid-19 and are expected to keep improving. We’ll keep you up to date with any changes that could affect customers via our regular Coronavirus blog.
We do face some challenges now as other energy companies’ systems and teams are less adaptable and they’re not able to help us as efficiently with switching, data and metering queries. We’ll work hard to minimise the impact of this on customers.
For some customers, energy bills have become much harder to pay as a result of the Coronavirus crisis. This is one of the biggest challenges facing energy customers during this time and I’d like to address this candidly too. I hope that by being frank, rather than issuing blithe and misleading statements, we can deal with this better.
There are two reasons customers may now struggle with energy bills (beyond any which existed pre-Covid 19).
With the UK’s social distancing, many customers are now seeing higher bills because they are working from home. And, of course, there are many households which have seen a dramatic drop in income through redundancy, businesses closing, shorter/zero hours, etc.
How working from home impacts customer bills
Our data scientists have done some initial analysis using smart meter data and found that a typical household moving from working out of home to working at home will use around £3-£5 per week more energy at the level of the government’s energy price cap (read the analysis in full here). There’s two things to note about that – an Octopus customer pays less than the price cap, and we also expect this £3-5 weekly figure to come down with reduction in gas usage as we start to hit warmer months.
I am conscious that for everything I write, there will be exceptions - and some very serious ones - but for most households, this extra energy consumption is not likely to be the big driver of hardship. Indeed, for households with the same income as before, the increased energy cost of £3-£5 per week is a lot less than the typical cost of commuting (about £66/month). Of course, in a household where one person has lost their job, and another is working from home, they’ll see drop in income and higher energy costs - and similarly for people with commission and other variable earnings. We recognise those differences. Similarly, we also know that for many households lockdown has led to lower outgoings. Everyone’s circumstances are different, but on the whole, drops in income are more instrumental in making it difficult to pay energy bills than the fact that people are using more energy at home.
So, what are we doing to help when people have had big drops in income as a result of Covid-19?
First – we signed up to a government charter which outlines the support energy companies are voluntarily giving to customers.
This has been covered by the media “energy companies to waive bills” or similar, but when you read the charter it’s much more nuanced. For example, here's the section on helping people whose finances have been impacted:
‘Based on individual circumstances, this could include:
- Considering reassessing, reducing or pausing debt repayment and bill payments for domestic customers in financial distress.
- Considering referring customers who are struggling to pay to third party debt advisers such as StepChange and Citizens Advice.’
This fairly low level commitment is the current reality not just for Octopus customers, but we believe for customers of other companies as well.
We’d love to do more – and our team and I have been working night and day with other energy companies, EnergyUK (our trade association), Ofgem and Government departments (BEIS, Treasury) to try to find a solution for people who need it.
I’ve been asked why Octopus aren’t, for example, just giving all customers a blanket payment holiday – or even writing off bills. I heard someone on the radio saying “these energy companies make so much money, why can’t they help?”
I’d like to show respect to customers and all readers by responding to this candidly – even when it could mean my words are misrepresented – but I’d rather be open and clear than opaque and evasive.
Energy companies - at least most - don’t make shedloads of money. Octopus lost £29m last year. Our rivals, Bulb, lost £129m. And here’s Centrica's share price over the last 5 years: