Eon boss reveals biggest challenges of 30-year career ahead of exit

From transferring millions of customers to a new billing system at the height of the pandemic to steering the company through the worst cost of living crisis in memory, outgoing Eon chief executive Michael Lewis admits the biggest challenges of his three-decade career have all come within the last three years. The young environmental specialist who joined what was then Powergen in 1993 could never have foreseen the “perfect storm” of challenges that he would one day be facing. In his final two weeks at the company, the Eon UK boss gives Utility Week a glimpse into the toughest years of his career, while spelling out his hopes for the future of the sector.

“The day that always sticks in my mind is 23 March 2020. It’s my birthday, actually, by chance. That was the day we announced that we were moving our customers, and Npower’s customers, to the Kraken platform and that we were going to completely reshape our residential business on this new flexible platform…The problem is that very day is the day that Boris Johnson announced the lockdown,” Eon Energy boss Michael Lewis reflects.

He is speaking to Utility Week in the final two weeks of his tenure as chief executive of one of the country’s largest power retailers. In a few short weeks Lewis will depart for Germany where he is taking on the role of chief executive of Uniper after loyally serving Eon since 1993. Eon is yet to announce a succession plan and is sticking to the line that the “process is ongoing”.

Despite such a long career, Lewis says the toughest challenges he has faced have all come within the last three years, “without a doubt”.

The energy giant’s announcement that it was to begin migrating customers onto Octopus Energy’s Kraken platform was massive news for the energy retail sector. Eon, a member of the ‘big six’, was only the second UK supplier to licence Kraken from challenger brand Octopus, with Good Energy announcing it had struck a deal to use Kraken a year earlier.

While the prospect of migrating more than 5 million customers onto a new system is a daunting task for any business, the fact this was starting as the government was ordering all but essential workers to stay at home was clearly worrying news for Lewis.

“So I remember sitting there in the evening watching Boris Johnson at his lectern and announcing this and thinking, wow, I don’t even know how we run our existing business with everybody working at home, let alone engaging in the most transformational project this business will ever have,” he adds.

When the pandemic arrived, Lewis was a seasoned industry professional. He joined what was then known as Powergen in the early 1990s as an environmental specialist. The company was bought by German firm Eon in 2002 and Lewis moved to Dusseldorf to work in group strategy. After spending well over a decade on the continent, he returned to the UK in 2017 to become the retailer’s chief executive. It was back on home soil that Lewis found the “perfect storm” of a highly competitive market, talk of introducing the price cap, the fallout from Brexit, “massive challenges” with legacy systems and, on top of all that, the absorption of rival Npower into the business.

“So each of those breaking waves brought new challenges and then right in the middle of that, a global pandemic struck,” he says.

The move into lockdown forced Eon, like the vast majority of other businesses in the UK, into home working. Lewis says shifting the organisation to homeworking in those first few weeks after lockdown was the “single biggest” challenge he faced. Yet as the world began to open back up, he soon found himself tackling an energy market that was in “meltdown”.

It was during this time that Eon Next took on just shy of 250,000 customers after becoming the Supplier of Last Resort (SoLR) to four collapsed energy retailers. All the while, bills were beginning to spiral. As the situation worsened, the government took the step of introducing the Energy Price Guarantee which capped bills at £2,500 a year for average households – a move welcomed by Lewis.

“There were times there where I had no idea how customers were going to cope before the Energy Price Guarantee was introduced. We were looking at bill increases that were terrifying – plus £4,000. We were really concerned there would just be mass non-payment, just because people couldn’t pay. So that intervention, the Energy Price Guarantee, was absolutely critical there. And of course, furlough was absolutely critical during Covid as well,” he says.

Despite the latest forecasts predicting that the price cap, which is due to be announced later this week, will fall to around £2,000, Lewis stresses the crisis is not over.

“I thought last year, when the crisis was in full swing, we were really getting solid engagement from the government. And to his credit, Kwasi Kwarteng in particular was very engaged in looking at, when he was energy secretary, about how we solve this.

“I get the sense that the pace has slowed down now that the crisis is perceived to have passed, but that’s my perception.”

He urges the government to act sooner rather than later and backs Utility Week’s Action on Bills campaign which, among other things, is calling for more targeted support measures to be introduced next year. In the meantime, he is calling for the Energy Bills Support Scheme (EBSS) to be revived for the coming winter.

For longer-term solutions Lewis continues to be a vocal proponent of a social tariff coupled with a relative price cap, which would cap the difference between suppliers’ cheapest and most expensive tariffs. He believes it is “eminently feasible” to have targeted support in place for the most vulnerable consumers by April 2024 and points to how existing policies such as the Warm Home Discount could be expanded, which he believes should be paid for through general taxation.

“I think we need to sharpen up sharing of data with government, and maybe even between…the water industry as well who are facing, in some ways, similar issues. So maybe we need to compare data and really focus on who are the people who are really vulnerable. But the Warm Home Discount is, in principle, a tool which we can use,” he says.

Since taking on the role of chief executive of Eon’s UK business in 2017, Lewis is one of the sector’s most recognisable figures. Why then is a man so clearly passionate about his company and the customers it serves choosing to leave the sector at such a pivotal time?

“I’m always up for an interesting challenge and there’s a nice circularity because the Uniper power generation portfolio is the old Eon portfolio, which is the old Powergen portfolio in the UK. Ratcliffe in Nottinghamshire was the power station I first visited in June 1993…it’s almost going back to where I started,” he explains.

As he prepares to leave the company he has dedicated so much of his life to, Lewis is asked to reflect on his thoughts for the future and whether he is optimistic about the sector. In response he says he believes the industry knows what it has to do in terms of expanding renewable generation and decarbonising homes.

However, he adds: “There’s a question mark around how we manage flexible green generation in the future, is it nuclear, is hydrogen? I think that’s the bit of the energy transition that is currently unclear and that’s the bit where more innovation is needed…so my concern is that we know what to do, but we haven’t put the policies in place.

“If you go back to Boris Johnson’s 10 Point Plan, actually, it’s all in there. We just need a government with the political will and the resolve to do it. And that would be my plea. We need to get going because we talked about 30 years to net zero, it’s now 27. The clock is ticking.”

He further observes: “When you’re young 30 years seems a long time. When you get to my age, it doesn’t seem five minutes since I joined Powergen.”