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Ofgem has ordered big six energy supplier Npower to allow 100,000 of its customers to join a larger collective switching trial.
The regulator wants the supplier to “co-operate fully” in the trial, which it says could help thousands of customers save hundreds of pounds by switching to a better deal.
Following the Competition and Markets Authority investigation into the energy market, Ofgem introduced powers to oblige suppliers to participate in its consumer engagement trials.
Last month, Ofgem issued Npower with a formal direction requiring the company to allow 100,000 customers on more expensive default deals for three years or more to take part in the next collective switch trial this winter.
“Npower has so far refused to fully comply,” Ofgem said.
The regulator issued a provisional order to Npower yesterday (24 September), which requires it to comply with the direction.
The trial aims to test whether the collective switch works at a larger scale.
Ofgem ran its first trial of a simplified collective switch involving 50,000 customers from Scottish Power earlier this year.
Mary Starks, executive director of consumers and markets at Ofgem, said: “While the price cap will tackle poor value default tariffs consumers can still save money by switching to better deals. We are exploring ways to make that easier, including the simplified collective switch.
“Npower is denying customers the opportunity to take part in the next collective switch trial. It is disappointing that we are having to resort to legal action. This should send a clear message to all suppliers that they need to live up to their responsibilities to help all customers get a better energy deal.”
A spokesperson for Npower added: “Npower is committed to taking steps to improve customer engagement and we have said to Ofgem that we’ll undertake a collective switch trial of 50,000 customers immediately and this is now unfortunately delayed.
“We are disappointed that at the final hour we have not been able to agree some detailed points with Ofgem including their request to undertake an even bigger trial of 100,000 customers.
“Npower will respond quickly to the action Ofgem has taken in order to allow us to move ahead with the trial as soon as possible.”
More than one in five customers who took part in the earlier trial changed their energy deal, the regulator revealed last month.
It said the figure is eight times higher than the switching rate of similar customers in the trial who received no information
The trial ran from February to April and involved 50,000 disengaged customers from a “large supplier” who had been on a standard variable tariff for three years or more. The company was unnamed at the time but Ofgem has since confirmed it to be Scottish Power.
In total 22.4 per cent of customers in the trial switched, with those switching to a new tariff achieving average savings of £300.
In August Ofgem said it was planning a larger collective switching trial involving more than 200,000 customers this autumn.
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