Utility Week

8 | 5TH - 11TH JULY 2019 | UTILITY WEEK Interview "We're not the only ones to be using a chatbot, by any stretch. As a society we are getting used to automatic replies to queries when you post it to a website or an app. If you need a detailed account query, obviously the robot can't deal with that and you need to be dealt with by a person. That's broadly how it works." While apps for a variety of things may be common- place today, Day is not naive and understands that this method of communication is not to everyone's taste. "Not everybody likes it and it's not designed neces- sarily for those that aren't used to, or comfortable with, being digital orientated. We know from research and we know from other sectors that apps at the moment seem to be the way it's going. What they provide is an immedi- acy and an intimacy that you don't get in any other form of electronic relationship." Drawbacks While being app-based is a good differentiator in today's market, it can have its drawbacks, as a recent case involving Citizens Advice highlights all too well. In March, Pure Planet accused the charity of using "arcane and potentially flawed methods" to calculate its star ratings for energy companies, a„er the supplier was ranked fourth from bottom. The company scored zero for ease of contact as the supplier did not offer customers a telephone number. But Pure Planet argued that its app offers customers 24-hour care through its chatbot and calls customers "when needed". Understandably, Day feels frustrated with how the star ratings table was calculated; a„er all, the compa- ny's business model caters for people who do not wish to spend their time on the phone if an issue arises with their supply. He is keen to emphasise that the company does have structures in place to help those who are in need. "Many of the very few instances we have had have been dealt with anyway. We ended up in this protracted debate about what technology to use." Following this interview, Day confirmed that Pure Planet had held "constructive discussions" with Citizens Advice and that an outcome had been reached. A "hot- line" between Pure Planet and Citizens Advice has been put in place should the charity need to contact the supplier with customer issues. Day explains: "In subsequent energy advice star ratings, Pure Planet will be better rep- resented, and we welcome Citizens Advice's intent to review how digital service propositions could be scored over time." Finance With his strong background in business, it's unsurprising that Day and his co-founders looked at how other newer players had entered the market and, in some cases, made a swi„ exit shortly a„erwards. "When we looked around just before we launched, we could see others that launched with a lot less capi- tal than we did. They were bootstrapping; that appeared to be a relatively easy way in, to get the market presence and to start to grow. "If you haven't got enough money when you are set- ting up a business, it's really hard to make it balance every day. I think that's what has caused problems for others and it certainly was in our minds that we needed an investor that could also potentially be a strategic part- ner, which is why BP was selected." Day insists BP was selected as a company that both understands and has the financial capability to make an investment of the kind that provides financial security. A minority shareholder, BP buys all the renew- able electricity and carbon offset gas on behalf of Pure Planet's customers, whom it refers to as its "members". The company's start-up capital remains confidential. Pure Planet is not the only company to have the backing of a major oil giant. In March it was announced that Shell had rebranded First Utility as Shell Energy Retail, revealing it had switched more than 700,000 Brit- ish homes to 100 per cent renewable electricity. With three decades of experience under his belt, Day is a man with strong convictions who is more than happy to take his time when building up new businesses. It is clear that his background in telecommunications has geared him up perfectly for a leading role in energy retail today. The industry will surely continue to watch Pure Planet with interest. "As a society we are getting a bit more used to automatic replies to queries" Smart meters Entering the market in 2017, Pure Planet was late to the smart meter party, but the supplier certainly wanted to hit the ground running where second- generation (SMETS2) meters are concerned. Instead of opting to begin its smart meter journey by installing poten- tially unreliable SMETS1 meters, Pure Planet opted to install SMETS2 devices instead. The national implementation of the meters has not been without problems, and severe ones at that. Day is keen to share his thoughts on the rollout. "It's frustrating in a word, frustrating for the industry, frustrating for the consumer, it must be frustrating for the government because it's not fulfilling what they said. It's been hard work I'd say. "I find it perplexing and, speaking personally, the more I got to know about the smart meter rollout, the more astonishing I found it. "There's no consistency in terms of technology, there's no consistency in terms of the story, in terms of what's told to the industry about when things are going to be delivered; it's been very frustrating to see." That said, Day says he is "pleased" that progress is being made and thinks it will be worthwhile once the mass take-up of smart meters is complete (see Smart Energy GB appointment, p5). "It will make everybody's life a lot easier. I think there's a lot of con- sumer benefit, there's certainly energy efficiency benefits depending on which study you look at, and that can only be good. "I think it will also provide educational benefits as well in terms of how people use energy over time. That will increase as technologies improve." Price cap Another recent addition to the energy retail sphere is the introduction of a price cap on default tariffs, something Day asserts Pure Planet was "against from the beginning" and akin to using a "sledgehammer in try- ing to crack a nut". Ofgem has argued the cap will protect 11 million so-called vulnerable customers from high prices. "Arguably it has not suppressed switching but it is not stimulating switching from those 11 million that are still on those high tariff rates," Day says. Specifically, he disagrees with the way the cap is calculated, with the methodology taking into account wholesale costs months in advance. "The way the calculation works is arguably going to cause problems over time. This wave effect of going in the opposite direction to what is probably needed at the time is also potential for a calamity."

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