Energy sector must get behind 24-hour switch over aim
The Department of Energy and Climate Change (DECC) has announced that switching energy supplier is about to become quicker, with energy companies committing to halving switching times by the end of 2014 - from five weeks to around two and a half weeks.
This move comes after Energy Secretary Ed Davey challenged suppliers to slash switching times last October as part of the Government's pledge to help energy customers get the real benefits of increased competition. Mr Davey made it clear that his long term ambition was to achieve 24-hour switching. We believe that his vision is the key to unlocking true consumer choice in energy supply.
At present, it takes far too long for the switchover to happen with various delays and errors that can occur before a customer is accurately billed in their new home. If the industry works together to align all elements of the supply chain, making switching both quicker and easier, the 24-hour switchover needn't be a long term ambition. There is also a mind-set across the energy sector that has to change - the customer needs to be placed at the very heart of supply.
In a recent survey by Ofgem, half of 21 million energy consumers were confused by energy tariffs, while almost half don't shop around. Approximately 45% felt they couldn't save money by switching and 24% thought it would be too much hassle. In our own consumer survey, 35% of respondents believed energy companies don't make it clear how to switch. The result of these perceptions is to stymie competition so customers miss out on preferable prices.
At the moment issues can arise to do with meter readings, consumption or property data which must be provided to the incoming from the outgoing supplier. It currently takes 60 days for the various flows to find their ways to the shared industry systems - data which can be wrong, late, or never appear.
Smaller providers like ourselves rely heavily on receiving timely and accurate data to get it right the first time and get off to a flying start with the newly-switched customer, allowing us to please them from day one. This is the way it should be if we are to help fulfil the Government's increased competition ambitions.
We aim to be live and supplying a property as soon as possible, so that the landlord and agent can immediately benefit from no billing during void periods and from our partner management support. From a tenant's perspective, we want them to inherit the very best rates from the moment they move in.
The longer it takes to switch the less able we are to establish supply as soon as the property becomes empty and sometimes even before the next tenant is found. As a result, agents and landlords can miss out on our tailored services and tenants miss out on savings and an easier move.
24-hour switchovers would revolutionise consumer choice in the energy sector and if all elements of the supply chain get behind the change now, Mr Davey's vision could become a reality sooner.
*Chris Gauld is CEO of Spark, the only energy company in the UK to specialise in the lettings sector
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