As its name suggests, Co-operative Energy is the UK’s first and only co-operative energy company. Unlike other suppliers, they return surplus profits to you as a customer. They don’t make money from charging you more than the market rate for your gas and electricity; instead, they are committed to making switching simple and providing excellent service at a competitive price.
If you would like to read more information or learn more about the pricing of business energy, you can do so here.
How Co-operative Energy Works
This idea is to cut costs down by not running unnecessary advertising campaigns or shareholders’ dividends, which can waste millions of pounds each year. Instead, what we save from not spending this money on these things is given back to members in the form of a dividend.
Here’s an example. Suppliers generally make their money primarily from their customers. Traditional energy firms often make 25% of their income from people who don’t switch and never even knew they could save by switching to a cheaper deal. In other words, they’re just as a customer from the beginning and so are already paying as much as they can.
But if people living in a building or on the street all switch together to Co-operative Energy, then we can work to make our prices even better for you. More members mean we have more people using our collective buying power. The savings you make will depend on how many people decide to switch with you.
Reasons for Co-operative Energy
The Co-operative Energy approach is a response to the changes that have taken place in the energy industry over recent years. The deregulation of the market has led to several high profile mergers, particularly between E.ON and Npower and Scottish Power and Swalec. This has meant a reduction in competition between suppliers, who can now raise prices without fear of losing customers.
The situation has caused many concerns both in the energy industry and among consumers alike. Large energy companies have been criticised for their poor service to their customers. They have also been accused of making money purely on the back of their customers. This claim is impossible to refute entirely since, as secrecy agreements with their shareholders bind all suppliers, there are no public statements regarding their level of profits.
To assist with this issue, Co-operative Energy has adopted the approach of putting fairness at its core. They make their profits on the customers they keep rather than their initial acquisition cost. If you go with them (i.e. don’t switch to a rival supplier), they are making money in your current contract period. If you do get a cheaper deal elsewhere, they will refund not only your difference but the money they would have made from you over an additional time.
The Co-operative Energy customers are automatically members of Co-operative Energy and are covered under The Co-op’s Essential Deal. With this deal, customers pay no more for their energy than their supplier must charge by their government regulator, Ofgem. This is guaranteed by the group’s membership in The Co-op and provides automatic membership of the Essential Energy Scheme (EES).
Co-operative Energy – Ownership and Regulation
The Co-operative Energy project is driven by the Co-operative Energy Group, a co-operative that coordinates energy supply to Co-operative members. Customers own the group, and it operates under the legal guise of an Industrial & Provident Society based on a not for profit basis.
Co-operative Energy works through The Co-operative’s trading arm, The Co-operative Trading Group (CTG). They aim to make sustainable profits for The Co-operative Group and their customers. The Co-op’s ethical policy ensures that they only deal with suppliers who share their commitment to the fair business.
Co-operative Energy Mission Statement
The group seek to be honest and transparent with their customers, aiming to run a business free of charge, price-fixing, and bias. The group also believes that customers should have the freedom to determine which services they purchase and how much. For example, if you would rather not have a landline and avoid using it for calls, you should be able to cancel your contract without paying an early termination fee. This is just one of the many factors that influence the group’s pricing, which they balance by constantly monitoring information on costs and potential changes in the market.
The Co-operative’s existence is based on its principles, which protect consumers and ensure responsible trading. All Co-op members are committed to spreading their values in the communities they live in through support for charities and local organisations.
Find out more about switching business energy providers here.
Other useful links about Business Energy
Understanding Business Energy
How Smart Meters Can Benefit Your Business
Things To Consider Before Switching Business Energy
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