Home Utility Suppliers

Countries covered: United Kingdom

Growing importance of value for money from Utility Suppliers

At a time of recession, the dominant issue among consumers in the home utilities market is price, but for the companies the bigger, longer-term issue is that of reducing carbon emissions to tackle the problem of climate change. In the gas and electricity markets there has been a great deal of volatility in wholesale energy prices, which resulted in soaring energy bills through much of 2008. While the recession has resulted in prices falling back in the short term, the long-term trend is still upwards.

At a time of recession, the dominant issue among consumers in the home utilities market is price, but for the companies the bigger, longer-term issue is that of reducing carbon emissions to tackle the problem of climate change. In the gas and electricity markets there has been a great deal of volatility in wholesale energy prices, which resulted in soaring energy bills through much of 2008. While the recession has resulted in prices falling back in the short term, the long-term trend is still upwards.

With a need to cut energy bills and carbon emissions, gas and electricity suppliers have been putting a big emphasis on helping their customers improve the energy efficiency of their homes, as well as investing in new technologies that will enable them to supply more energy from renewable sources.

The industry remains highly regulated, and as part of this regulation, Ofgem launched an investigation into its competitiveness and pricing during 2008, the findings of which were broadly favourable.

But the regulator would like to see more competition in the gas and electricity markets, something that does not exist at all in domestic water utilities market, and is particularly keen to introduce measures that will encourage more switching between suppliers. While switching is already well developed, there is a large degree of consumer apathy and certain groups that remain disadvantaged.

Key themes

Volatility of gas and electricity prices and consumer perceptions of the pricing policies of utility providers.
Extent to which households switch suppliers using switching and price comparison sites, and consumer apathy about switching.
Examining tariff options such as dual fuel (same supplier for gas and electricity), online accounts and fixed tariffs.
Consumer perceptions of the utility brands and main factors determining the choice of gas and electricity supplier, including reasons for switching.
The importance of renewable energy to consumers and whether consumers are willing to switch to a different supplier to help the environment, even if it is not the cheapest.
Initiatives by companies to encourage greater energy efficiency in the home and opportunities for products and services.

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11/25/2009 - 4