Utility Week

26 | 7TH - 13TH DECEMBER 2018 | UTILITY WEEK Customers Interview Barney Cook, Eversmart B arney Cook is no stranger to hardship in the energy business, having seen his family business close following a bad deal with a big six supplier. Aer real- ising how ruthless the market can be, the young entrepreneur set out to do things his own way by launching a brand-new energy retailer – Eversmart. Stretford-based Eversmart is one of more than 70 energy suppliers in an increasingly crowded market. There is no doubt the open market allows for fresh faces and competi- tion, but it can and has been an unforgiving place for those small suppliers who bite off more than they can chew. In the past year, there has been a spike in the number of smaller suppliers that have been unable to cope with market conditions, prompting concerns that the rules for market entry are too simple. So much so that Ofgem recently announced it was proposing new financial and customer service tests for sup- pliers seeking a supply licence. In notable cases like Iresa Energy, which ceased trad- ing in July this year, complaints were a major factor in the company's demise. The process of applying for a licence "wasn't too difficult", says Cook, but it does require new starters to provide upfront investment to work with the distribution authorities. Speaking to Utility Week, Cook is quick to emphasise that his company – which cur- rently has 32,000 customers – only takes on customers it can handle. "If you look at our customer acquisition it is very spikey because we turn the taps on and off." Eversmart adapts its customer acquisi- tion strategy to the time of year. Cook says the company is less "aggressive" in its acquisition through the winter months but will take on more customers in situations where say the wholesale price decreases. In other words, they only take on what they can afford. Cook's energy journey began when he was working with his father and brother at Go Greener – his family's business. Go Greener was contracting with big six sup- pliers but was dealt a severe financial blow when one ended its contract with the smaller firm suddenly, aer it had invested a sig- nificant amount of capital into the project. It was this experience that Cook says led him to launch Eversmart, to "repair the relation- ship between consumers and their energy supplier" and effectively "steal" customers from the big six – which, he feels, do not care about the smaller guys or consumers. Cook acknowledges there has been inno- vation around systems and specialist compa- nies that have been set up to offer retailers a cheaper route into the market. However, he believes there is a lack of expertise in pric- ing, especially in his local area of Manches- ter. This was a major disadvantage for him when setting up Eversmart. Despite careful planning and prepara- tion, smaller businesses with a reasonable- sized portfolio such as Eversmart can find themselves in deep water. Since Utility Week spoke to Cook, Eversmart was named by industry regulator Ofgem as one of the four suppliers that owe Renewables Obligation (RO) payments. Along with URE Energy, Eversmart must pay its outstanding obliga- tions by 31 March next year. With a £58.6 million total shortfall in RO payments, investigations have been launched into Economy Energy and Spark Energy and a mutualisation process has been triggered for the first time. In response to Ofgem's announcement, an Eversmart spokesperson said: "We are aware of the Ofgem ruling and will abide by the terms set by the regulator." Nevertheless, during the interview Cook insists Eversmart has a handle on its risks. "We recognise our risks and we recog- nise how we can be sustainable. Although we have seen growth in certain months it doesn't mean we are growing at an acceler- ated rate every month, so we are very meas- ured in how many customers we take on. A big driver in our customer acquisition is our smart meter rollout." Smart meters are a hot topic in energy. The latest figures show suppliers have now installed 12.5 million SMETS1 meters – 7.1 million more than the 5.4 million originally intended. According to the National Audit Office (NAO), the government's original ambition of offering 53 million smart meters in 30 million homes and small businesses by 2020 will not be met, and the cost of the rollout will likely "escalate beyond initial expectations". Eversmart has been "pro-smart meters" from its conception, says Cook, and he is keen to emphasise his company's smart credentials. "We see the value for both con- sumer and supply business of having rich How Eversmart cuts its cloth New retailer Eversmart says it only takes on the customers it can afford, and believes that will make it a more sustainable business in a crowded market, as Barney Cook tells Adam John Although we have seen growth in certain months it doesn't mean we are growing at an accelerated rate every month, so we are very measured in how many customers we take on

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