My inspiration for Ebico – the UK’s only-not-for-profit energy supplier which was set up to offer a fair deal to all customers – came during the 1990s when I was tasked with establishing a business case for British Energy to enter the newly liberalising domestic gas and electricity market.
During research for my then employer, I discovered that “premium” customers who used lots of energy and could afford to pay by direct debit would be targeted with the best deals in the new, competitive energy market.
However, there would be little, if any, competition for customers on low incomes who used pre-payment meters in order to budget for their energy bills, and they could end up paying a lot more than their wealthier counterparts.
I thought it was grossly unfair to penalise people on low incomes who were already struggling with utility bills and I believed that energy should be offered at the same price to all customers regardless of their method of payment.
Approximately 3 million households in the UK have got pre-payment meters and many of them are charged up to three times as much as direct debit customers.
I set up Ebico in 1999 to meet the need for fairness and equity in the domestic energy market by offering the same rate to all customers regardless of their method of payment. I also wanted to tackle the ever increasing problem of fuel poverty, which affects many of the most vulnerable people in society including the elderly and single parent families. It currently affects five million households in the UK and is responsible for 20,000 to 50,000 premature deaths each winter. (People are said to be in fuel poverty if they spend 10 per cent or more of their income on gas and electricity).
Since Ebico’s objectives are primarily social, rather than economic or financial, I wanted profits to be ploughed back into good causes that would help to reduce fuel poverty and encourage people to use less energy, rather than being distributed to shareholders. With this in mind, I set up the company by Limited Guarantee and established a trust fund – The Ebico Trust for Sustainable Development.
The Ebico Trust donates thousands of pounds to worthy causes that not only help to alleviate fuel poverty, but also raise awareness among customers of how much energy they use and help them to take control of their energy bills through long-term behaviour change.
For example, last year we gave a £120,000 grant to expand Groundwork’s Green Doctor Scheme. The scheme sends fully trained experts out to homes in North London, Slough, Reading and Leeds to conduct free, energy use audits.
Using a combination of technical and non-technical measures from fitting draught excluders to topping up loft insulation, the two-year programme is helping householders save money while reducing CO2 emissions by up to 680 tonnes.
Another of my key objectives in setting up Ebico was to make energy bills simpler as well as cheaper. Many energy companies offer sliding tariffs or standing charges, which are confusing for customers. We make bills easy to understand by offering the same single, flat rate tariff to all customers and we have no standing charge. Since our customers pay only for the amount of energy they use, it is easier for them to take control of their energy bills and to cut their costs by cutting their energy usage.
We help them do this by working alongside housing associations to run promotional activities and through our regular email and printed newsletters which contain useful tips on saving energy, such as turning down the thermostat by just one degree, which can save 10 per cent on energy. In conjunction with Oxford University, we have also developed a free, online tool – Imeasure – which helps people monitor their energy usage and carbon emissions, and see where they can make further savings.
Our educational campaigns have been so successful that our customers have reduced their energy usage by an average of 10 per cent in the past year.
Eleven years since its inception, Ebico has 55,000 customers in England, Scotland and Wales, and continues to grow. We compete against all the major players in the energy market and are rated among the top energy companies for customer satisfaction by Which?
Despite the rising problem of fuel poverty in the UK, we are still unique in running a not-for-profit energy company. We have also been very much ahead of our time in our efforts to help customers help themselves and the environment by making their homes more energy efficient and finding other ways to reduce their energy bills.
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