Energy merger could see more mistakes not cheaper prices

The merger of SSE’s retail business with N-Power has been billed as a drive to form a more efficient organisation, which potentially could offer cheaper rates for customers.

PCMG, who specialise in recovering energy costs for businesses believe the merger could potentially lead to more billing mistakes, and bigger profits, rather than cheaper rates.  

Martin Chitty, director of energy analysis, said: “Due to the economies of scale, the new SSE/N-Power merger might have cheaper running costs however, with the ‘Big six’ turning into the ‘Big five’ there will be a significant reduction in competition, which means that cheaper running costs may just turn to bigger profits rather than cheaper rates for customers.”

Martin also believes that the merger would cause significant disruption and the subsequent scale of the company could end up leading to major customer service issues alongside the potential billing errors.

He commented: “Mergers naturally cause disruption particularly to billing processes and customer service.  The energy industry already has a bad reputation for billing mistakes, in fact only recently a report by uSwitch revealed domestic customers have been over charged to the tune of £102m through mistakes.  We’ve also seen this issue first hand with businesses. Our team has worked with blue chip companies where we have recovered millions of pounds due to mistakes in billing by energy providers. This merger will only exacerbate what is a major problem in the industry.”

PCMG is a world-class operating cost consultancy, working across the private and public sectors.  Since its launch, the firm has recovered more than £400m in costs for clients thorough auditing and effective management of energy, telecoms, water and accounts payable.

For more information visit www.pcmg.co.uk.