Lighting the way to faster switching
7th March 2017
For too long the energy industry has moved at the pace of the slowest, not the fastest, and it’s consumers that suffer.
This is due to programmes that attempt to move the industry as a whole to better standards, which inevitably means moving at the pace of the least innovative business in the market.
It stands in striking contrast to the competitive forces in most markets, where companies that are incapable of innovation are left behind, while the businesses that better fulfil consumers’ wants and needs flourish.
In light of this, we are glad to make a contribution to Ofgem’s consultation on faster switching between suppliers.
Here is our submission:
Octopus Energy supports faster switching. We passionately believe that realtime switching is possible and that the closer we get to that, the lower the costs to the industry – and ultimately consumers – whilst delivering dramatically greater consumer satisfaction.
We are unable to complete the cost templates you’ve provided because we do not perceive, for us, any real cost in any of the paths you’ve described (RP1-3) and the current situation (RP0).
We have teams of developers continually working on improving consumer experience both during and around the switch, so implementing these paths is simply a question of priorities rather than of additional costs. We do not expect we would need to hire extra resource in any meaningful way, although any of the paths may incur typically one full-time person as a programme manager.
We also believe that the costs this imposes on other suppliers are simply a proxy for the forces of change usually driven by a competitive market. For example, the costs required by an e-commerce company to move from “one week” delivery to “next day” delivery, engendered by competitive forces.
As such, we urge you to consider this being an optional, or multi-speed programme. That is, allowing suppliers like us, who welcome the ability to prioritise faster switching to do so, but others to hold back until they are ready. This would, of course, necessitate outgoing suppliers having no choice but to lose customers quickly, whilst receiving suppliers move to faster switching at their own pace. We believe this requires minimal change to industry systems (indeed, it is already possible to switch electricity only in 2 days).
We believe this should also apply to the objection regime – if outgoing suppliers are not able to object at the speed the receiving supplier can onboard, then they lose the chance.
Whilst this document is not to the template, it is intended to explain why we believe that the cost-benefit analysis should see “zero cost” for us, and indeed for other suppliers, given that they should be given the choice about whether to adopt or not.
We'd love to see these measures adopted by Ofgem to create a much fairer and more efficient energy market in the UK. If it forces others to improve their inefficiencies, then so be it. Switching shouldn't be a matter of weeks, but of days – the fewer the better (preferably zero).
Banks have already sped up current account switching to just 5 days in a market rife with competition – surely energy can do the same, or better?
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