Co-operative Energy Review
Another relatively new energy supplier, launched to take a slice of the supply cake from the Big Six.
Co-operative Energy is part of the Midcounties Co-operative – the country’s third biggest co-operative. It now has more than 504,000 members.
The organisation offers energy nationwide and has no shareholders – instead members get a share of its profits.
As with the other smaller operators, the Co-op’s offering says it wants to keep costs to a minimum and tariffs simple, all to benefit customers.
Sound good? Maybe.
But Co-operative Energy also bills itself as something else.
It claims to put principles before profit.
Co-operative Energy say, “That means only making decisions with you in mind, always offering fair prices, and doing our bit to combat climate change too.”
That’s a bold claim. Certainly being all ethical is a good thing, especially for our Co-operative Energy review. But it’s not so great if your service is poor.
The fact is that Co-operative Energy has a lot of work to do to win back the trust of the UK public – and it’s going to take a lot more than the long list of glowing reviews and testimonials on its website.
Most complained about Energy company
Because it has the distinction of being an award winner – it has actually outshone the Big Six energy suppliers on at least one front.
Last year it was the most complained-about energy supplier in the country – the first of the new guys to beat the Big Six in this regard.
The company was plagued by complaints and bad reviews from customers about inaccurate bills, mistakes over energy switches and problems with logging into its website. The IT failure was caused after it brought in a new billing system last summer.
And it was warned that if it didn't sort things out it would be banned from recruiting new customers.
Data released by the Ombudsman showed that Co-op Energy had received a market leading 136 complaints for every 100,000 customers – and these were only those complaints that had been escalated to ombudsman level after the company had failed to resolve them in a six-week time-frame.
Billing problems are one the most common energy complaints
A word of caution – and not just about Co-op Energy
But it’s worth pointing out that many industry experts do not accept that such a rise in complaints can be wholly put down to IT glitches.
The real reason, they argue, is one that can apply to any of the new energy companies and it’s about capacity.
As these smaller companies try to grow fast, they naturally try and compete hard on price. One of the consequences is that when they market an especially attractive price, they receive a sudden influx of new custom.
And the stark truth is that they are not equipped to cope with the sudden increase in volume.
Chief ombudsman Lewis Shand Smith said: "Small firms are growing at a pace that is faster than they expect, and as a result find it difficult to cope when they do receive a complaint.
"Meanwhile the Big Six have improved significantly after investing heavily in complaints handling.”
Did you know? An energy provider that finds itself at the top of the best price league table can expect to bring in 50,000 new customers a week.
That might be worth bearing in mind when making your choice of energy provider.
If you care about more than just landing the best price for your energy, and if you believe ethics is not just the next county to Sussex, then Co-operative Energy may well score highly when you come to choosing supplier.
Because one of its big selling points is its ethical credentials.
As Co-operative Energy says: “What other energy company can say their decisions are made in your best interest? The Big 6 energy suppliers are owned by shareholders; when they make a profit, it is the shareholders who benefit, not the customers. However, when we make profit, it is you, our members, and your community who benefits.
“As members, you are the owners of The Co-operative. You have a say in how the business is run, decide how much profit is shared and reinvested, as well as share any profits that we make. And, to say thank you, we reward our members once a year with a share of the profits in proportion to how much business they do with us.”
On top of that, this is an outfit that actually believes in paying a fair share of taxes!
“As a values led and ethical organisation, we believe that we should pay the taxes which are due and not engage in aggressive tax avoidance schemes, even if legal.”
What about green credentials?
Co-operative Energy doesn’t make a big sell of how green it is – it focuses on ethics instead.
But it does say that it commits to ensuring that the renewable content of the energy it provides is at least better that the Big Six.
So, where does its energy actually come from?
* 36.6% Coal
* 34.24% Natural Gas
* 13.43% Nuclear
* 9.77% Renewables
* 5.96% Other
So, under 10% from green sources, or over 23% if you count nuclear as green.
Co-operative Energy says it is “committed to a sustainable world, and this is reflected in our ambition to obtain 75% of our energy from renewable sources within the next three years.”
Under 10% of the Co-operative's energy is from renewals
Co-op Energy Customer Service
We’ve already mentioned the problems Co-operative Energy faced last summer, problems that made it the most complained about energy company.
But the number of bad reviews to the Ombudsman it attracted is one thing, what about other aspects of customer service?
Not great unfortunately. It came 20th out of 22 energy companies in the Which? customer survey.
For customer service it scored just two stars out of five, two out of five for clarity and accuracy of bills and just one star for the way it dealt with complaints. Its best ratings, of three stars each, came for helping customers save money and for value for money.
It’s overall rating was a lacklustre 45%.
Update: In late October, Co-op energy agreed to pay £1.8m in compensation to customers for shocking customer service. Here's the full story.
Co-op Energy Tariffs
A number of options are currently offered.
Two fixed tariffs until March 2017 – Prices, as the name suggests, are guaranteed until the end of March 2017. A cancellation fee of £30 applies per fuel – so £60 for both gas and electricity – for the paperless billing version.
There’s also a fixed tariff until the end of April 2017 without exit fees and with a choice of paper bills or paper free.
The Pioneer Variable is equivalent of a standard tariff with variable prices.
To find prices offered you’ll need to answer a series of questions about energy use and the type of property you live in.
Generally speaking, you’re unlikely to find Co-operative Energy to be the cheapest energy provider on the market.
UPDATE: In September 2016, Co-op Energy announced a 3% gas and electricity price rise (6% if you have a prepayment meter) would kick in from October. It's the only supplier so far this autumn to raise prices.
What about its online offering?
We rate its website as pretty average. It’s reasonably clear and easy to navigate and it’s mobile version is very accessible.
You should have no trouble finding your way around the site to pay bills, offer readings, or move home.
Its guides on ways to pay, reading your meter, providing a meter reading and so on are well laid out and easy to understand.
A Spokesman Said's view
Co-operative Energy has, in some ways, in the past few months been a victim of its own success, being unable to deal with the tidal wave of new customers last year.
This led to a certain amount of chaos that has reflected badly on the Co-op's reviews and customer service rankings. Whether this has been fully sorted out is unclear.
Generally probably not the cheapest offering on the energy market.
Like the other smaller players, tariffs are relatively simple and clear.
While there are no extra incentives to switch to Co-operative Energy, other than finding it offers you a better deal than other providers, it does at least attempt to behave ethically.
For many customers, this could be a serious consideration. The bottom line is it’s a co-operative not a company, so if that appeals this may be the provider for you.
They claim they won’t do what pretty much every other energy provider does - offer great cut-price promotions for a limited time and then increase prices. Instead, they claim, their intention is to save the customer money in the long term.
This guide was updated on 28.10.16 to include news of Co-op Energy paying compensation to customers for poor service.
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