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electricity4business - making a stand with UK small business.
The Big 6 Electricity Suppliers leave small businesses out in
the cold
When electricity prices began to tumble after de-regulation
small businesses were left out of the party. It was only after
some forward-looking new entrants appeared that some small
businesses began to see a modest reduction. But despite
switching supplier to take advantage of cheaper prices most now
find themselves back with their former supplier or one of the
Big 6. In fact these Big 6 have a combined market share of over
96% after swallowing up the new entrants in virtually
unchallenged takeovers.
Furthermore, some 2/3 of these companies are owned by French or
German multi-nationals - hardly the healthy competition the
Government announced would result from de-regulation in the
1990s. Perhaps if the Government had intervened to prevent the
same companies from owning both the generation and distribution
of electricity supplies then we would have seen far less
concentration.
And small businesses are the most vulnerable of all electricity
consumers.
Large industrial users can use their purchasing muscle to
negotiate better rates.
Domestic consumers are heavily protected by the regulators.
Domestic suppliers are legally bound to publish prices and the
regulator actively encourages the consumer to visit independent
and impartial price comparison sites in order to find the best
deal.
It's also easy for the domestic consumer to change supplier
whenever they like.
Not so for the small business who invariably finds price
comparisons impossible due partly to the complex supply number
system but also to the widely fluctuating wholesale prices
experienced under current market conditions. You simply don't
have the time to evaluate a quotation in the fear that it can
change completely by the next day.
Then there's the timing. The window of opportunity for a small
business to switch is very limited.
Complicating the comparison process still further are the
various ways in which a supplier can quote. Some choose to load
the standing charge whereas others load the unit price.
The worst load both!
This lack of transparency only leads to confusion on the part of
the small business who has other more pressing activities to
deal with. No surprise then why some small businesses just
cannot be bothered looking around.
If you're sitting cosily on a large share of the market making
ridiculously large profits there's no incentive to be lean.
Bureaucracy reigns. Ever tried calling to sort out an incorrect
bill? Then you'll know where we're coming from.
About the author:
Bernard Scally