Is Ofgem turning energy into a six-horse town?

Energy Bill has extensive experience working for suppliers, TPIs and other energy companies. Still employed in the industry, he writes exclusively for ELN on the issues facing the industry. Many […]

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By Energy Bill

Energy Bill has extensive experience working for suppliers, TPIs and other energy companies. Still employed in the industry, he writes exclusively for ELN on the issues facing the industry.

Many years ago, I spent a few months hanging out in bookies. I had friends with contacts in the inner circles of horse racing and occasionally a tip would come my way. As a Business Studies student, I think I learned more about capitalism in those forays into the local betting shop than in my lectures.

Racing has been through its fair share of scandals in the intervening years. Doping, race-fixing – you name it, it’s happened. But imagine if someone alighted on the wheeze where no matter which horse finished first, you would win? Sounds good, doesn’t it?

This seems to be the sort of wheeze that Ofgem want to allow in energy. They’ve announced a consultation on ‘white label’ suppliers. Well, I say suppliers but in fact this is no more than a rebranding of an existing supplier, usually one of the Big Six.

A white label would be supermarket-brand energy. You might think you’re buying from Tesco or Sainsbury’s but in fact the supermarket chains don’t take out a supplier licence, don’t buy the energy for you and don’t send you the bill. This is all done by their ‘partner,’ an existing supplier who manages the contract and all those horrible regulations and licencing issues for them.

You can see what’s in it for all concerned. The supermarket builds their brand, the supplier keeps hold of or develops its customer base and Ofgem doesn’t have to deal with any more pesky supply licencees.

What’s interesting about this, though, is that in the consultation, reference is made several times to white labels providing increased competition. But if you ask the person in the betting shop what they would think if the Grand National’s 40 runners were only owned by six stables, I think most of them would see the odds being stacked against the customer. There are few clearer thinkers than the person filling in their betting slip. I think they’d have a point.