Co-op cools on collective switching

Co-operative Energy has issued a warning over collective switching. The supplier, which doubled its customer base this summer after it won the Which? Big Switch reverse auction, said collective switching may increase market opacity and cross-subsidies, and may not achieve economies of scale because consumers can simply switch again.

The company stopped short of ruling out taking part in similar exercises, such as the Cornwall Together project launched last week or iChoosr’s project with South Lakelands District Council, which launched this week.

“We may participate if the conditions are right,” business development manager Nigel Mason told Utility Week. “With the Big Switch, it was possible to bid an existing tariff, Which? committed to provide everyone with a personalised whole-of-market price comparison, the scheme was well run and the motives of the promoters were sound. Not all those conditions will always be present.”

Meanwhile, it has emerged that Big Switch participants have been left out of pocket because exit fees had not been included in personalised estimates provided by Which?

The iChoosr reverse auction is scheduled for mid-October. Co-founder Bart Stevens said the initial auction should switch “a couple of thousand” of South Lakeland’s 70,000 constituents.

This article first appeared in Utility Week’s print edition of 3 August 2012.

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