When energy brokers play dirty

We’re constantly being told to compare the market in our search for cheaper energy prices. But are we being prevented from making meaningful comparisons by a system that’s too complex, and a culture of truth-bending?
By: Trident Utilities
 
Aug. 7, 2013 - PRLog -- Company X is entitled to a Climate Change Levy rebate. They’re advised to switch to a green contract that will “save them money.” Instead, they lose their rebate and pay more for their energy. Perhaps it’s an honest mistake on the part of the advisor. Perhaps it’s incompetence. Perhaps it’s something more sinister. Darren Robertson has met enough frustrated businesses to suspect the latter.

“Clients tell me they’ve been quoted energy prices which were ‘fully inclusive’ of all charges and taxes, but failed to include the Climate Change Levy or Renewables Obligation,” says Darren.

“In other instances the supplier is inaccurately quoting these and other pass through costs, making them seem cheaper than they really are.”

In his experience Darren estimates that, where prices have been misquoted, the average level of discrepancy is 10%. Given that many of the businesses with which Darren works have an annual energy expenditure of £500,000+, that’s more than a minor inaccuracy.

Lack of clarity or duplicity?

“I think a market that’s inherently complicated carries with it the risk of error,” Darren explains“. As brokers and suppliers, it’s our role to make that market clear, so the client can make an informed choice that’s also the right choice. Simpler energy pricing has again been called for by both Ofgem and EDF in the past month and it’s essential to eliminating errors and bad decision-making.

“But there are organisations which I believe are deliberately taking advantage of the fact that energy pricing isn’t easy.”

Darren points to certain companies with a ‘say anything to get the sale’ approach. “With some, client benefit is such a distant second to maximising margin that they’ll reduce expected consumption levels in order to make the quote seem more attractive. I’ve even seen claims of special or unique arrangements with suppliers that simply don’t exist.”

Finding clarity

“Make pricing clear and you remove the potential for clients to be misled,” explains Darren, who makes integrity and honesty a cornerstone of Trident’s offering, even extending to a written guarantee of accuracy.

Yet until changes are made, the responsibility for ensuring all is as it seems rests with the client.

“If surcharges aren’t included, or they don’t look realistic, you should ask questions,” he says. If you don’t know what ‘realistic’ looks like, use the following table as a guide to costs that may form part of your quote:

Feed In Tariff                                                              2-4%

Renewables Obligation                                            10-12%

Climate Change Levy / Green Uplift Charges                5-7%

Transmission Charges & Losses                                 3-5%

Distribution Charges & Losses                                10-15%

Other (AAHEDC, BSUOS etc)                                 approx. 3%

And if the energy market still seems too bewildering to enter alone, take a broker you trust with you.

Bio: Darren Robertson is Director of Energy Trading at Trident Utilities. An energy analyst and procurement specialist and Member of the Society of Technical Analysts, Darren has more than 25 years’ experience working within the Energy Markets and has been directly involved in the development of Innovative Flexible Contract terms, with Energy Suppliers for both large energy consumers and SME’s.

 

 

 
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Source:Trident Utilities
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Tags:Energy Pricing, Innacurate Quotes
Industry:Manufacturing
Location:England
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