Octopus Energy will take over Iresa’s 90,000 customers from 1 August. Ofgem appointed Octopus under its ‘supplier of last resort’ mechanism after Iresa ceased trading earlier this week.
Octopus Energy said it will honour outstanding credit balances, including money owed to both current customers and past Iresa customers.
The company urged customers to try to avoid contacting them for a couple of weeks. Greg Jackson, chief executive of Octopus Energy, said, “We are delighted to welcome Iresa’s customers to Octopus, and we promise to be a safe haven after the terrible experience they have had. Iresa’s records are in a terrible mess, so it will take us a bit of time to untangle them. Customers should take a meter reading as soon as possible, sit back and relax while we transfer them to our systems.”
Octopus will contact all of Iresa’s customers before 14 August 14 – moving them onto its cheapest “Flexible Octopus” tariff – and in the interim there will be no supply interruption. Switches to Octopus will be completed around 21 August, from which point customers will be contacted to let them know they have full access to an Octopus online account or are free to switch to other suppliers.
If customers do try to switch away from Octopus before this confirmation, the switch will likely fail as industry processes mean it’s not possible to run two switches at the same time.
Greg Jackson on the customer relationship
Octopus Energy currently has 220,000 customer households (about 400,000 gas and electricity accounts) and in an exclusive interview in July Greg Jackson told New Power it was taking on 30,000 to 35,000 accounts a month.
When it comes to getting a better deal for customers, Jackson was dismissive of many of the high-profile options. He told New Power: “We have bonkers ideas like auto switching and switching auctions for default customers and all these are missing the point. The current crop of auto switchers are just arbitraging loss-leading deals from energy suppliers. They are not solving the problem, they are making it worse. There is no qualification and there is no relationship between consumer and retailer.”
The auto-switchers and collective switching are “new middlemen, [when] the last thing we need is more layers of obfuscation”. On auto-switchers, he says: “If retailers are the people who are supposed to engage with people to bring them smart meters and engage with them towards better tariffs, either the auto-switchers need to do all of that stuff [themselves]” or provide far more information about the destination companies. At the moment, instead of creating long-term engagement between retail and consumer we are “turning it into a series of one-night stands with no commitments”.
As for collective auctions, “if retailers have failed to engage consumers, don’t create some kind of heavy-handed engagement for them”.
He adds, “On the one hand a stakeholder group loves the supplier to innovate and interest consumers, and on the other hand they drive business to the companies that do precisely the opposite of that. It’s perverse.” And he has often made the argument that switching disengaged customers over to a short-term deal that will turn sour does not benefit them.
With 400,000 accounts, Octopus has grown to the point that it will take on social and green obligations such as the Warm Homes Discount. Companies can elect to join the Warm Homes Discount scheme. Had Octopus? If a customer asks, says Jackson, it will give them the discount. “I’m pretty sure that some of our bargain basement rivals with poor reputations don’t do that.”
Who owns the home?
Energy suppliers have been looking over their shoulders at other retailers and at companies like Amazon and Google for some time. Will there be specialist energy companies in future?
Jackson says yes, because other retailers, “would not want to be in a market where the average annual bill is £1,000 pounds and your margin is £30,” and one where “You are exposed to highly volatile commodity markets on one side and high regulatory exposure on the other.”
What about, for example, “concierge” services that include energy. Who owns the home? Energy is an expensive way of getting to the customer, he says. “If Amazon wanted to be the owner of your home it would do it by supplying ever more innovative products and services via Alexa – that would be the bundle.”
He has another route: “We are really a technology platform and today that might mean the platform is very good at buying on the wholesale markets and billing consumers half-hourly, daily, weekly or whatever. In the future that might mean sitting between two consumers” who are swapping excess power with each other.
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