How energy firms’ failings are making the case for renationalisation

OVO’s overcharging is just the latest problem to hit consumers, writes James Moore

The privatised energy market is attracting heated criticism (Reuters)

Switch to OVO Energy. You could save up to £227. That’s if we don’t cock up your bill and overcharge you.

The last part was my addition to the Google ad blurb in the wake of the company coughing up £8.9m in penalties through getting hauled over the coals by Ofgem.

The regulator’s summary of the company’s screw-ups is one reason why talk about nationalisation isn’t going anywhere despite Labour’s general election defeat.

OVO, for those who haven’t encountered this business (congratulations), bought SSE’s retail business last year in a £500m deal that catapulted it into second place in the market.

It’s worth taking a moment to digest Ofgem’s findings of its performance, for which the word “dismal” is to me entirely appropriate.

It mucked things up for more than half a million customers between July 2015 and February 2018. Per the watchdog, many didn’t receive annual statements.

Over and undercharging resulted from it underestimating consumption one winter.

Around 10,000 customers were not given statements of renewal terms when their tariffs were ending or they were not moved to new tariffs.

Some 17,500 prepayment meter customers were not initially charged at the correct regional level of the prepayment meter charge cap.

A further 8,000 customers ended up paying above the level of the prepayment meter cap due to OVO not moving them to new tariffs when their existing tariff ended. On and on and on it goes.

But it gets worse. Despite being aware of the issues, the company failed to report them to Ofgem, which is what regulated firms are supposed to do, and was also found to have dragged its feet when it came to putting them right.

OVO has put a statement up on its website in response to the watchdog’s announcement, and that’s worth a look too because it’s a doozy.

It kicks off by blowing the corporate trumpet: “Since the day we were founded, serving our customers has been our number one priority.”

It might just be me, but Ofgem’s findings raise, shall we say, questions about that claim.

More twaddle follows before we get to an acceptance of “Ofgem’s findings of issues regarding estimation processes, information formatting and pricing errors”.

“We have not always got it right,” the company concedes.

But then we’re back to the self-serving guff: “We are proud of our record. In particular, during the time these infringements occurred, we were voted uSwitch Supplier of the Year four out of five times and achieved a customer satisfaction score of 96 per cent – the highest in the survey’s 11-year history at the time.”

No, OVO. No, no, no.

You want to say you’re sorry. Just sorry. None of the other stuff. Sorry.

I know that’s the hardest word, but when you get caught with your pants down to this extent you say it, and you promise to do better, and you make an effort to do that because anything else just adds insult to injury and makes it look like you don’t really take the issues raised seriously.

But it isn’t just OVO that needs to learn how to say that word, now is it.

This is hardly the first time an energy company has been hauled over the coals for making a mess and causing customers financial pain and inconvenience. And I doubt it will be the last.

Which brings us back to nationalisation and the reason it’s a good deal more popular than Labour proved to be when it proposed the policy before the recent general election.

There are people who ask whether an energy industry back in state hands would do any better for the consumer. But I think this sorry tale, and the many others I’ve written about, raise a different question: “Could it really get any worse?”

The answer to that is: “It’s really quite hard to imagine how it could.”

It’s not just OVO that should be saying sorry. It’s also the people who delivered the disastrous energy privatisation project, the Tory ministers who dreamed it up and the Tory MPs who slavishly voted for it.

But you’re even less likely to hear regret from them than you are from OVO.