Utility warehouse chief praised the end of the ‘devastating’ energy price war and suppliers are set to take advantage when rivals collapse
- The UW boss criticized the energy regulator’s ‘competition at all costs’
- ‘Consumers are now facing billions of pounds to make the mess tidy’
- In October alone, the company saw a net increase of 15,000 customers
Heads of utility warehouses have said the spiraling energy prices have finally put an end to the ‘devastating price war’, with the company ready to take advantage of rival suppliers.
As the latest supplier of bulb busting and technological nationalization, UW co-chief executive Andrew Lindsay criticized the “inherent shortcomings” of the fuel regulator’s ‘at all costs’ policy.
‘Consumers are now facing billions of pounds to clean up the mess, so we welcome Ofgem’s commitment to prevent this situation from happening again and create sustainable competition between suppliers, but allow us to meet the challenges. Conversion to net zero together, ‘Lindsay said.
Utility Warehouse is benefiting from the energy price crisis that is sending many competitors to the wall
His comments came amid criticism of Ofgem for allowing many low-capital companies to enter the market and take a punt on wholesale prices.
Last month, the regulator launched a review of how the price cap on gas and electricity bills is calculated and reflects the risks that companies face.
But while the energy crisis that is unfolding is causing a raft of providers to collapse, it is a godsend for a utility warehouse that provides broadband with energy.
Owned by London-listed Telecom Plus, UW operates in a different way than the UK’s ninth largest energy supplier and its competitors.
It has a long-term contract with Eon under which the German firm will supply the UK retail price cap at a permanent fixed discount and take all hedging risks.
This means that UW is usually the newer firms that come into the market and in the short run the prices are reduced.
This made it more difficult for UW’s 45,000 free agents to sell their service bundles to friends and family. UW’s strategy sees agents getting new customers to sign up.
But with rising energy prices leading to the collapse of many competitors, UW takes advantage because it is one of the few providers offering tariffs below the energy price limit.
Its variable tariff is £ 1,213 per year, and the current price is less than £ 1,277, although that offer is only valid if customers switch all their home services – energy, mobile and broadband.
Shares in UW owner Telecom Plus have risen more than 35% in the last three months since the energy crisis took hold.
“In response to the sharp increase in wholesale fuel costs in September, virtually all suppliers quickly withdrew their discounted acquisition tariffs, making our standard fuel tariffs cheaper on the market,” the company said.
It hailed a ‘very strong’ start to its second half, with a net increase of 15,000 customers in October itself.
‘While we do not believe this run-rate will continue, we expect an increase of about 10 per cent in the number of our customers in the second half,’ it added.
Shares of Telecom Plus traded up 8.8% to £ 14.10 in early morning trading on Tuesday. They have increased by more than 35 percent in the past three months as the energy crisis hit.
It currently has more than 660,000 customers across the services it sells, all tied to one bill.
Revenue rose 6 per cent to £ 371.3 million for the half year to September, while adjusted pre-tax profits fell 5 per cent to £ 26.2 million.