With the increased news coverage around failing utility companies, spiralling wholesale energy costs, and the impact of the price cap on the UK energy market, our Utilities team, past and present, share their views on what this could mean for consumers, and how we at Lowell are getting ready to support the sector in what could be a winter of turmoil.
Uncertainty for companies and consumers alike
Our Business Development Manager, Dayle Hutchinson shares his thoughts on what's happening in the market:
"We are in the midst of a period of immense uncertainty in the market. The challenges of getting to net zero, the wholesale cost of purchasing energy, and making a return relative to the price cap imposition, is leaving suppliers, especially the smaller institutions, very vulnerable heading into the winter. We could feasibly see a significant series of company collapses over and above the few we've already seen.
For consumers, this will likely see a period of uncertainty - with a lack of clarity around which company to engage with (especially during periods before a Supplier of Last Resort is appointed), and difficulties in understanding their bills and the management of growing debt."
SoLR - what is it?
The Supplier of Last Resort (SoLR) is both a procedure and an energy supplier, appointed by the UK energy regulator Ofgem. When an energy supplier has gone out of business, a consumer will receive a notification from them explaining why they've stopped trading and who their SoLR is going to be. It was a process created in 2003, however due to the current volatility and rise in wholesale energy cost, it has become much more prevalent over the last 18 months.
Around 2 million consumers have already been displaced in 2021 - as almost 20 suppliers have ceased trading and a SoLR has been appointed. It doesn't look to be stopping there, with energy providers being stuck in a battle between the energy price cap and rising wholesale prices.
Lowell in the utilities sector
Since 2017, Lowell have helped its utility partners deal with over 2.4 million termed customers through debt purchase. Such purchases have ranged in customer base size from 5,000 customers to 300,000 at a time, facilitating the removal of over £1bn of debt from collective balance sheets.
Lowell offer energy providers an option to safely migrate non-active customer relationships. Lowell put customer experience at the forefront, and by doing so mitigate brand damage from the process.
Former Head of Sector for Utilities, Mark Platts, explains how Lowell have operated in comparable circumstances:
"The principle of selling a term debt book attached to a brand that no longer exists isn't new to Lowell, we've seen portfolios containing historically closed brands many times before, and earlier this year we worked with a major supplier as it closed a one time Big 6 brand they had recently acquired. That process saw us engage with 250,000 customers who had already left supply, and simplified the migration of still active customers to their own brand."
Lowell can support with term debt books
We recognise that for many organisations being appointed under SoLR, the main priority will be to continue customer supply and migrate customers into their brand whilst meeting their obligations to Ofgem to do right by their customers - but the customer base will inherently have challenges too.
Lowell specialise in the management of customers in arrears - adopting a balanced, customer centric approach to resolution. If you'd like to understand more about how Lowell can support your organisation, contact Dayle Hutchinson on 0333 5550 or via our Contact Us form