Energy switching: Can it be done in just one day?
- 31 October 2013
- From the section Business
The Energy Secretary, Ed Davey, says he eventually wants consumers to be able to switch energy suppliers in as little as one day.
But even if the energy companies are happy to comply, is it technically feasible to switch so quickly?
"At the moment, it can take over five weeks, which is completely ludicrous," said Ed Davey.
He told MPs that he wants to bring that period down to one week to start with, then down to just one day.
"My ambition is to get it down to 24 hours," he said.
"If you can change your broadband provider with the click of a mouse, why can't you do it with gas and electricity?" he added.
Earlier, he accused the energy companies of deliberately making it harder for people to switch, in an attempt to hold on to their existing customers.
"The big six have been trying to prevent people from switching. That's not acceptable," he told the BBC.
He cited changes in the banking industry, where switching current accounts now takes seven days, rather than the several weeks it used to.
One of the big six, SSE, said there were hurdles to switching in 24 hours, as one full day is currently allowed for a cooling-off period.
But Sam Peacock, the director of external affairs at SSE, said his company was committed to trying to make it work.
"We're really keen to make switching easier," he told the BBC.
And he denied that energy companies deliberately made it harder to do so.
"Absolutely not. We want customers to switch to us and, if customers want to leave us, we've got to make it possible," he said.
British Gas, the UK's largest energy supplier, said 24 hour switching was perfectly possible.
With the help of new technology, it could be even faster than that.
"In the long-term, the introduction of smart meters to all homes in Britain will enable quicker, easier switching - potentially within hours," said Ian Peters, managing director of residential energy at British Gas.
The company has installed more than a million smart meters so far.
However, Clare Francis, of the switching site MoneySuperMarket.com, said a 24 hour switching period was "slightly optimistic."
But she said it might be possible if the transfer period did not start until the new provider confirmed it was happy to take on the account.
"It wouldn't surprise me if it's 24 hours from your new account being accepted and opened," she told the BBC.
She said that at the moment switching is taking an average of six weeks, although completing the application forms can take as little as five minutes.
Labour was sceptical about the switching plans.
"What use is switching more quickly when all the energy companies keep putting up their prices? That's no help to consumers," said Jonathan Reynolds, Labour's energy spokesman.
Mr Davey said at least three of the big six energy companies, E.On, SSE and Scottish Power, had already agreed to consult on switching periods.
And he said they would not be able to put up prices by claiming that switching costs them money.
"That can and will not happen," he told MPs.
He also said that energy firms would be forced to comply with any new switching standards.
"We are prepared to take action and compel those who drag their heels," he said.
No one from Energy UK, the body that represents the energy suppliers, was available for comment.