Energy News

Co-op enters the energy market with a competitive dual fuel deal

Thursday 12 May, 2011

By Martin Fagan - martin@consumerchoices.co.uk

The Co-operative Group says its single-tariff energy deal will “challenge the complicated pricing of the ‘big six’ suppliers.”

The Co-operative Society has launched its own gas and electricity tariff to challenge the “big six” energy suppliers, providing consumers with a simple, single deal which it says will be fair, competitive and have no strings attached.

Co-operative Energy will have just one product - Pioneer, named after the first UK co-operative founded in 1844 - and one tariff.

Unlike other suppliers’ tariffs, there will be no fixed-price contracts locking customers into uncompetitive deals, no exit penalties for switching supplier and a single unit price, irrespective of consumption.

As it’s a co-operative, customers are “members” and have a stake in the Society, and the Co-operative’s energy deal will include a twice-yearly profit-sharing deal for all its customers.

The Co-op also said it will never tempt new customers with lower prices and better deals at the expense of existing customers, nor will it indulge in sharp practices such aggressive doorstep selling because the Society believes this to be “unfair”.

Staying true to its environmental principles, the Society sources its electricity from low-carbon renewable energy sources such as wind and hydro.

“It’s time this industry had a radical shake up,” said Co-operative Energy’s Nigel Mason.

“Customers have been bamboozled by complicated tariffs and confused by changing prices and unfair contracts, and it has to stop.

“We are determined to provide a fair and transparent service for Co-operative Energy customers and to let them share in the profits. We are campaigning for long-overdue reform in the energy industry.”

In March this year, the energy regulator Ofgem reported there were 4,000 separate energy deals with a bewildering array of prices and tariffs which the regulator said “bamboozled” consumers.

Ofgem’s review found all the “big six” suppliers had profited by raising bills more quickly when commodity prices changed, and that competition in the industry had been stifled, causing poor customer service and a lack of transparency.

The Co-operative's launch has been welcomed by customer watchdog Consumer Focus.

Audrey Gallacher, head of energy at Consumer Focus, 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."