So Energy back on its feet – but trust must be won back, says boss
The energy industry needs to win back the trust of customers following the collapse of dozens of suppliers, the boss of a leading challenger firm has admitted.
Monica Collings, chief executive of So Energy, told City PM that billpayers have a right to feel aggrieved over record energy bills, which have been worsened by the collapse of poorly managed energy firms.
She believed “the wave of supplier failures” has severely impacted customers’ trust in the industry.
“It hasn’t done us any favours, and of course customers are still picking up the cost for those failures, which is impacting bills as well,” Collings said.
Over 30 suppliers have fallen since the rebound in demand for gas after the pandemic exposed firms with insufficient hedging strategies, while the significant hike in wholesale costs following Russia’s invasion of Ukraine meant the price cap put immense strain on suppliers.
So Energy was one of the companies seemingly under pressure, with concerns growing over its future last winter when it appointed financial advisors in a bid to secure £50m of emergency funding
However, Collings is looking to ease the concerns of its 300,000 customers – confirming that So Energy’s position in the market is secure.
She revealed the “exploration for funding” was no longer needed following both the decline in wholesale prices – which enabled the supplier to buy gas and electricity at lower costs – and the scale of the government support package for customers.
“The change in those circumstances and the support from our majority shareholder ESB in combination allowed us to no longer require the additional funding,” she said.
So Energy pushes for more support this winter
With Big Six suppliers consolidating 90 per cent of the market, and So Energy seemingly lacking a USP compared to large pro-green suppliers such as Octopus Energy and Ovo Energy, Collings was hoping its customer service and selection of packages would ensure it remained attractive to customers.
Looking ahead, Collings expects So Energy to “punch above our weight” on matters that are important to them.
This includes matters such as representation in the industry, with Collings the only female chief executive in the retail supplier market, and also further support for ultra-high energy bills.
So Energy is calling for a more targeted scheme to replace the current energy price guarantee – with the price cap expected to remain near £2,000 per year over winter when demand is at its peak, nearly twice the pre-crisis levels.
Collings argued that “we are absolutely not out of the woods” and that this winter “is still going to be considerably challenging for a good number of households”.
She believes there is time ahead of winter to replace the government’s current energy price guarantee which is applicable to all households, and can subsidise bills at a rate of around £2,500 per year.
With bills already below that level but still high, Collings warns as many as 10m households could be exposed to fuel poverty – where a customer has to spend over 10 per cent of their overall income on heating their home.
“We believe that support is necessary, what we don’t believe is that it needs to take the same form it did last winter. We have time now to work on something that is better targeted, that ensures we are matching the support to individuals that need it most,” she said.
This would mean support for people on means tested benefits and in the lower income brackets – data held by HMRC – which she argued would avoid “another costly and inefficient universal support package” while ensuring people that are choosing between eating and heating are given enough support.
She said: “What we’re looking for from government is that they actually mobilise the industry now so that we’ve got suppliers and consumer groups that can come together to deliver something that is a workable solution that is more efficient.”