NEWS

Citizens Advice’s latest star ratings for energy suppliers are out – and they make grim reading. What can they do to improve their scores?

Every quarter, Citizens Advice publishes star ratings for energy suppliers, tracking customer satisfaction across a range of metrics. The latest ratings are out, but unfortunately, they’re amongst the lowest ever across the industry, with no signs of improvement. 

In this article, we’ll look at these ratings in more detail and what suppliers and the wider industry can do to serve their customers better. We’ll also catch up with five energy suppliers making moves in the market. Let’s get started.

Declining customer service ratings

Citizens Advice’s latest league table of star ratings was published on June 25th 2024. It showed that over the last three years, average supplier star ratings had fallen by 10.5%, with no improvement at all over the previous year.

Top of the league table was Ecotricity, with a rating of 3.77 out of 5 for the first quarter of 2024. Bottom, in 16th place, is the giant EDF Energy, achieving only 2.06 out of 5.

Citizens advice use a variety of inputs to compile these star ratings, including:

• Call waiting times
• Number of complaints made to Citizens Advice, the Extra Help Unit and the Energy Ombudsman
• Data relating to billing and switching

Suppliers are legally required to disclose accurate data on criteria such as call waiting times. If they do not, Ofgem can penalise them.

What’s the solution?

With customer satisfaction scores at record lows, the industry needs to collectively take action. But what specifically should it do?

For the last two years, Citizens Advice has been calling for the implementation of a consumer duty into Ofgem’s regulatory requirements framework. It echoed this request after the most recent set of poor supplier scores.

The consumer duty would be similar to the requirements the FCA runs in the financial services industry. The overarching goal is that suppliers deliver good outcomes for customers. At the moment, customers only have to ‘treat customers fairly’.

The requirements called for by Citizens Advice would ensure:

• Energy products at a fair price
• A high standard of products that meet customer needs
• Information is simply presented and easy to understand
• Support that meets customers’ needs and ensures they can benefit from the energy products they’ve purchased

Citizens Advice has also asked suppliers to make more effort to tackle the long backlog of complaints before next winter. 

Supporters and critics

As you may expect, the suppliers that are rated highly in the Citizens Advice league table are celebrating, while the lower-ranked suppliers are calling the whole initiative into question.

For example, leaders at Octopus and EDF are unhappy with Citizens Advice’s methodology. They criticise Citizens Advice’s prioritisation of call waiting times when customers can use other methods, such as WhatsApp and online chat boxes, to contact their suppliers. They question whether call waiting times are a significant contributor to customer satisfaction, arguing that if the customer is happy once they’ve finished their call, the waiting time doesn’t matter that much.

On the other hand, table-toppers Ecotricity are happy with Citizens Advice’s methods, welcoming recognition for what they claim is the best service at the fairest price. 

However, Citizens Advice are confident that its methods are sound. A spokesperson stated that they use a variety of metrics to compile their star rating, and that the suppliers know the methodology and have the chance to raise concerns before the ratings are published.

Suppliers making moves

Away from Citizens Advice’s league tables, many suppliers in the UK energy space have been busy developing their businesses in recent months. Here’s what’s been happening:

• Utility Warehouse’s profits are up 21.5% year on year. It now has more than 1 million customers, making it the 7th biggest energy supplier in the UK
• Scottish Power has partnered with the Energy Systems Catapult to help provide heating solutions to vulnerable households via local NHS bodies
• EDF has introduced an innovative new solar tariff to encourage customers to install solar panels and storage batteries
• Octopus has integrated Tesla Powerwall Batteries into its Kraken platform, allowing users to transfer energy back to the grid. Customers can charge their batteries when prices are low, then sell power back to the grid when prices are higher, pocketing the difference for themselves
• OVO is exploring new strategic options, potentially involving new investments or changes in ownership

Everybody needs energy

Energy is a staple service that everybody uses, but that doesn’t mean suppliers can take their customers for granted. Competition in the industry doesn’t seem to have led to suppliers trying to gain an edge by providing fantastic customer service. In fact, customer service is substandard almost across the board. 

It’s unclear exactly what to do to remedy this situation, but Citizens Advice’s plan for a consumer duty framework may be a good start. We must wait and see what happens.