First Utility

March 30, 2012 06:00 ET

Four Ways First Utility Aims to Revitalise UK Energy Industry

LONDON, UNITED KINGDOM--(Marketwire - March 30, 2012) - In late 2011 First Utility (http://www.first-utility.com/), Britain's largest independent domestic energy company and the provider of the UK's cheapest gas and electricity deal*, launched a manifesto to create a more competitive UK energy sector.

Darren Braham of the gas and electricity provider stated: "High profile calls for greater competition in the market, and more recently, promises from politicians to 'break up' the stranglehold of the Big Six energy firms that currently dominate, have so far resulted in very little for consumers worried about their bills. As one of the newest entrants into the energy sector we want to challenge the 'big six' to get a better deal for the consumer."

First Utility's actions for reform include calls for government and Ofgem to:

  1. Take Action on 'Predatory Pricing'

First Utility believes the 'Big Six' energy companies are taking advantage of disengaged customers and blocking competition, reducing consumer choice and creating in essence a vicious circle which prevents the growth of newer entrants. The manifesto states First Utility's opinion that this behaviour is anti-competitive and may even be in breach of Ofgem licence conditions.

  1. Reform the Wholesale Market

The Big Six are vertically integrated and control over 80% of generation as well as over 99% of the retail domestic market. As a consequence there is insufficient energy traded on the wholesale markets to provide liquidity for growing supply businesses such as First Utility to directly access the wholesale products they require to grow their customer bases. New entrants are left with little alternative than to strike up a bilateral deal with a generator who is more likely than not to be a competitor.

One of Ofgem's solutions is to require the 'Big Six' to auction 10%-20% of their electricity generation output to let more companies enter the market. First Utility believes this figure should be in excess of 50%.

  1. Raise the Threshold for Restrictive Environmental Obligations

Existing thresholds are set to exclude smaller and newer players from the market who are fighting hard to win customers from the Big Six. First Utility feels the problem is that all such existing schemes have been designed around the 'Big Six' energy suppliers and so a higher threshold (First Utility proposes 1 million dual fuel customers) and a more phased introduction of such requirements would create a more level playing field.

  1. Act on Smart Meters

First Utility is looking for greater impetus in the roll-out of smart meters in order to give consumers the ability to manage their own energy consumption. The aim is to empower them to take control, making changes and reducing spending when prices are high. First Utility urges DECC to agree technical specifications and full details of the roll-out as a matter of urgency to allow innovative smaller players such as First Utility to carve out their own unique place in the market.

Recently First Utility partnered with Opower, the US software vendor, to provide UK utility customers with energy-saving tools based on smart meter data.

Read First Utility's manifesto for change in full at:
http://www.first-utility.com/sites/default/files/First-Utility-Energy-Manifesto-October-2011.pdf

About First Utility

First Utility is the smarter independent utilities supplier, offering electricity and gas services to a range of consumer and business customers. It is the only energy provider to roll out smart meters to all its customers, throughout the UK. It is through the use of smart metering technology that First Utility can empower consumers to manage and reduce their own energy consumption and bills. First Utility is headquartered in Warwick. For more information visit www.first-utility.com.

* First Utility's iSave v10 is the UK's cheapest deal based on an average of all regions and average use of energy (3,300 kWh for Electricity and 16,500 kWh for gas.

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