Advice for Consumers: Choosing the Best Electricity Supplier for Your Needs

January 2001

Introduction

This leaflet draws on a National Audit Office examination of how far domestic customers have gained from competition among electricity suppliers and is aimed at helping you obtain the best deal for you.

Competition in the electricity market

Since May 1999, all electricity customers have had a choice of supplier. The National Audit Office found that by June 2000, some 6.5 million customers - one in four - had saved money by changing supplier, and customers were changing at the rate of 400,000 a month.

If you have not yet changed supplier you could reduce your bills by up to 13 per cent. That is £30 a year on a £250 annual bill. And it pays to shop around - you will want to balance quality of service with price.

By shopping around

Wherever you live in Great Britain there are at least 10 companies selling electricity to domestic customers. The National Audit Office found that the prices charged by your local electricity company, the one that served you prior to the introduction of competition, are in many cases higher than those available from other companies. But this position may change.

The National Audit Office also found that many customers were not clear how to change supplier or compare prices, but that the process was relatively straightforward. Nearly every company will provide you with a quotation over the telephone if you tell them how much electricity you used, or how much you spent, in the past year. If you have access to the Internet, you can obtain the names of other suppliers from Ofgem's website (http://www.ofgem.gov.uk/) and some are listed in telephone directories.

If you have gas, consider buying your electricity and gas from the same company (called a dual fuel contract). Dual fuel offers the advantage of dealing only with one company. But dual fuel deals may not be cheaper than buying electricity and gas from different companies.

Make sure you compare like with like when you compare prices, for instance, direct debit with direct debit (and check whether the prices quoted include VAT). Different companies have different standing charges, so that the amount of electricity you use can make a difference to which company is cheapest for you.

If you agree a contract on the telephone (or on the doorstep) the supplier should contact you within a fortnight to make sure you understand that you have a contract and that you're happy with the way the sale was made. If you are not happy, you have the right to cancel the contract.

Remember : if you do not tell your existing supplier you have signed up to a new supplier, they may stop the transfer. Also, make sure you have paid any outstanding bills from your existing supplier - if you don't, they may stop you from switching.

By changing how you pay

You do not always need to change supplier to save money.

Suppliers usually offer different prices depending on how you pay - the commonest options are paying quarterly after receiving a bill, direct debit from a bank account, or pre-payment meter. You may also be able to pay in cash weekly or fortnightly, or by postal order. You can obtain information from your current supplier.

It is usually cheapest to pay by direct debit.

By using electricity more efficiently

Electricity companies must give information to customers who ask for advice on using electricity efficiently in their home including, for those with electric heating, how to insulate your home to prevent heat loss. Electricity suppliers must also give their customers information about possible ways of getting financial help toward the cost of work to make their home more energy efficient.

Consider quality of service

The National Audit Office found that the level of complaints by customers who had switched supplier, although relatively low, was significantly higher than by those who had not. If you have access to the Internet, information on the number of complaints against each company are available on Ofgem's website (http://www.ofgem.gov.uk/).

If you are unhappy with the service you receive from your electricity supplier, you should in the first instance contact your supplier. If you are unhappy with their response to your complaint, contact energywatch on freephone 0800 887 777 or write to it at the address below.

Further information

energywatch was set up by the Government in November 2000 to handle complaints from consumers and represent their interests. To obtain further information call it on freephone 0800 887 777. Its address is Abford House, 15 Wilton Road, London SW1V 1LT. Their web address is: http://www.energywatch.org.uk/.

The National Audit Office report "Giving domestic customers a choice of electricity supplier" is available from this website.