On Tue 2 February, we’re launching our new ‘Big Winter Energy Collective Switch event’, but we’re having to change the way our collective switches operate, so I wanted to bash out a quick blog to explain why.
First the background
Collective switching first hit the scene in May 2012 in a push by the then coalition government. The concept is that a trusted intermediary or local agency, such as a council, negotiates a deal with an energy supplier, then gets people to switch.
In the early days while I supported the principle and thought it was a great way to get those offline engaged, it didn’t produce market-leading deals. Doing a five-minute comparison would beat the collectives that were available every time. And my stance was simple, MSE wouldn’t put its name to one until it offered many people the cheapest price.
If you’re wondering why I say “many people”, not “all people”, that’s because prices vary with usage and region, so “all” is a very tough ask. That’s why we always ensure we include a full comparison as part of it, just in case it isn’t a winner for you.
In October 2014 energy firms’ attitudes were changing and we decided to try organising a market-leading deal collective using the power of our Cheap Energy Club and weekly email. We succeeded and since then we’ve organised a further two collectives; together they’ve helped over 200,000 people switch – far more than anyone else.
What’s the change and why
Most collectives operate by making you register in advance, then once they’ve got the numbers, they use them to get bids from energy firms to be their winner.
We’ve never done this, frankly as we didn’t need to, with over 10 million people getting the weekly email and over 1.9 million energy club members, there was no need to prove we had the critical mass – so we preferred to allow people to see what the deal was before signing up.
That is now having to change due to a clarification of the collective rules from Ofgem. It’s said that if people are able to register and switch at the same time, then the energy firms must tell all their existing customers of this tariff in the section of the bills where they publish their “cheaper tariffs”.
While this is great in theory, once Ofgem did it, my energy club team started to hit a brick wall to get you a new deal. Most firms we spoke to said either they wouldn’t give us a good deal in that case, or wouldn’t be able to cope with the logistics of putting this information on the bill for a short amount of time.
As I don’t believe there’s much point in us doing a collective switch unless it’s market leading (you don’t come to us for a costlier deal than the cheapest) we have had to take the decision to go for a pre-sign-up collective. Yet Ofgem has agreed everyone who already gets the weekly email and/or is registered with the Cheap Energy Club count as our members.
So if you want to see if the next collective is good for you and you’re not already a member, then either join Cheap Energy Club or get the weekly email before midnight Sun 31 January. As we’ve managed to beat the market’s best deals every time so far, I’m very confident we will do so again.