Energy companies, like all companies, rely on their profits to continue existing, but should Ofgem’s proposals for capping prices for prepayment meters go ahead, Utilita could run into a few walls.
Utilita are a small, but growing, energy company with almost 200,000 customers, but they say that the plans being proposed by the energy watchdog Ofgem would have eliminated 90% of their profits during the last financial year. “This would be the end of us growing our prepayment meter business,” said Bill Bullen, the company’s founder and MD. “Last year it would have taken out 80 to 90 per cent of our profit, which is not sustainable.”
The CMA have been investigating energy suppliers for two years now, amid constant complaints that they overcharge customers, and the new cap was designed to help people on prepayment meters stop being ripped off. Needless to say, energy companies have called the proposals very poor, and have lodged a number of complaints.
Roger Witcomb, who led the investigation, said last month: “For customers on prepayment meters, a group which contains some of the most vulnerable customers, their options are far more limited. It’s more difficult for their suppliers to compete, more difficult for such customers to switch and they have far fewer tariff choices.” At present, the CMA suggests that those of prepayment meters are overcharged by £300m a year in total.
The call centre company who handle calls for the likes of Scottish Power, Spark Energy and Utilita have announced plans to create 500 more jobs in Tyneside. The firm has seen a 50% growth in sales over the last two months, and will likely see £20m of turnover by 2017.
That growth has partly been driven by the huge growth in small energy companies. Recent years have seen it become ever easier for customers to switch away from the big six energy companies, and many more of us have taken the opportunity to join up with a smaller energy provider, which, of course, has led to a huge number or calls to the Utilita customer service number.
The call centre company got their start with Utilita, and MD Neil Wilson said “This year has been an extremely busy one for us as we see continued growth amid strong demand for our services, particularly around our energy-focused contact centre operations.
“Success is being driven by the quality of the services we provide and the friendly yet highly skilled and dedicated nature of our frontline sales and customer adviser teams.”