Tuesday, 31 January 2012

Southern Electric - We Have Frozen Our Prices

The big freeze turns into a 4.5% thaw
Southern Electric - Did they mislead customers into a choosing a price fix?

I've been a Southern Electric customer for quite a few years. They score very highly in customer service polls and when I phone them they answer my calls quickly and deal with my account without problems.

I was offered a price plan called Go Direct 5 which saved me about 19% on gas last year, but like all good things it came to an end in December. So they wrote to m
e and suggested I could call them about fixing my energy prices for 2 years until December 2013.

The letter they sent me also said 'we're the only energy supplier to have frozen our prices until at least August 2012' (now extended until October).

So bearing in mind Southern Electric had 'Frozen' their prices until August - and prices tend to drop in spring and increase in Autumn, I chose to 'fix' at the December 2011 price for 2 years until December 2013.

So I wasn't too thrilled when in early January 2012 Southern Electric announced that they would decrease their Gas price by 4.5% from the end of March. Funny kind of price 'freeze' guys.

Even worse on 26th January a letter dated 5th December arrived saying 'You've made a great choice fixing your prices with Southern Electric'.

No - not such a great choice actually - you've dropp
ed your price by 4.5%, and I'm stuck on the old price.

So on Saturday I phoned Southern Electric to complain they promised prices were 'Frozen' so I fixed, but now they have dropped the price. Their letter misled me into making a choice I may not have made if they'd given me all the facts.

Now remember I wrote at the outset that I stay a Southern Electric customer because of their customer service? Well they didn't disappoint. The manager I spoke to agreed I could end my fix without exit penalty if I wished, and that she wo
uld investigate the letters I received.

Today she called me back, exactly as she promis
ed. She's reviewed all the letters and listened to the phone calls I had with them in December and spoken with the Customer Services Manager whose name appears on the letters. I can be assured Southern Electric value my feedback about their marketing.

She also confirmed I can end my fix without penalty, it is entirely my choice.

I point out that their website still promises 'Our Prices Won't Budge' and perhaps the marketing department should choose their words more carefully - 'Won't Budge' doesn't leave much room for ambiguity - especially if prices may come down as well as go up.

The word 'Frozen' didn't suggest prices may also come down.

I'm very happy with the way Southern Electric has investigated my complaint. But I agree with the regulator Ofgen that energy suppliers overly complicate the market by offering so many different tariffs which are difficult to choose between. Many consumers end up doing nothing and remain on uncompetitive plans with the same supplier they've had for years. That limits competition in the market and keeps prices artificially high.

In reply the energy companies have agreed to simplify tariffs, and make consumer choice clearer. Southern Electric has said that in future it will have just 4 tariffs. British Gas has pledged simpler tariffs 'to win back trust'.

Southern Electric are selling their tariffs using words we all understand - 'frozen' 'won't budge' - now all they need to do is stick to them.

I've decided (despite my complaint) to stick with my price fix. Prices rose 19% last year, so far they've only dropped 4.5%. Averaged over the last 2 years energy prices have only gone in one direction - up.