Utility Week

UTILITY WEEK | MARCH 2023 | 11 Interview continued overleaf A er Brian lost his wife, he was plagued by loneliness. Wandering along his local high street in Shirley, Southampton, one day in 2019 the pensioner discovered his energy retailer Utilita had opened a shop. Lured by the offer of free energy efficiency advice – and with little else to fill his day, Brian went in. Four years on and Brian now visits the Utilita Energy Hub several times a week. The prerequisite of a query about energy has long been abandoned and Brian now stops by for a cup of tea and a chat – both with the staff but also the various community groups that use the venue to host meetings. "It's not the sort of thing you expect from an energy supplier," the shop's manager Kat admits while showing me around. "But for people like Brian we're a part of the community." This Utilita Energy Hub is one of nine operated by the supplier across the country – offering top-up services (for non-Utilita customers as well), energy advice and meeting spaces for community groups, among other services. For Bill Bullen, Utilita's founder and chief executive, these kinds of initiatives are a way to build a very differ- ent picture of energy retail than the one portrayed in the media over the past year. He tells Utility Week: "When I was a kid, it was com- mon for utility companies to have a presence on the high street. But aer privatisation, they shut them all down and retreated into their call centres. I can't help feeling the level of trust in utilities started to diminish from that point. "There's a lot to be said in the current climate for energy retail brands to be getting back out on to the high street and talking to people. We shouldn't be hiding behind call centres." Bullen could be forgiven for wanting to shy away from the limelight of late, given that public trust in energy retailers sits at a nadir in 2023 and that prepay- ment meters (PPM) – his company's speciality – have recently become a lightning rod for that criticism. This follows the appalling allegations from an undercover investigation by The Times into the working practices of contractors for British Gas. However, Bullen is adamant that we need to start having a "grown-up" conversation, not just about PPMs but about support for customers more generally – and who will pay. But for that to happen, politicians and regulators need to stop taking cheap potshots at retail- ers, he insists. "I really am very angry about us all being tarred with the same brush," he says, referencing the reac- tion by government and Ofgem to the British Gas story. "Just because there's bad practice at one company, that doesn't mean all energy suppliers are doing the same. Yet, time and time again, that's the impression that's given. And it's not helpful to anyone." He points out that Ofgem and the government have been keen to "name and shame" bad practice over recent months but asks: "Why couldn't they also take the opportunity to name the companies that are doing the right thing in this case?" Referring to the frequent broadsides from energy secretary Grant Shapps, who has been criticised for conducting conversations with the industry through the media rather than face to face, Bullen says: "This is jumping on the bandwagon. It's populist politics and may well end up in some bad decisions. For those of us with long enough memories, we remember when prepay was actually banned and pretty soon they decided to go back because the alternative was really awful. Either people end up getting disconnected or the bailiffs end up going round. I don't think anybody wants that." The original disruptor My visit to Shirley and Utilita's headquarters nearby in Eastleigh was originally intended to mark the company's 20-year anniversary, although events overtook any thoughts of a celebration. Utilita has always been an outlier in the industry. Bullen formed the company with university friends aer selling his first start-up (a business retailer) to British Gas. They identified two areas of opportunity – the pre- pay market and the use of technology. Two years later, the company installed Britain's first smart meter and has since scaled up to over 800,000 customers. The majority of these are on PPMs, making Utilita a big player in a market of c4.5 million pay-as-you-go users across the country. Bullen says that for years the brand had very little competition either in its start-up ethos or the focus on PPMs. "It was a market most people avoided like the plague. The big guys almost seemed to want to get rid of these customers and when new entrants started coming into the market they were rarely looking at PPMs. The ones that did, without exception, copied us in terms of the technology and the way they went about it. We very much wrote the book on this." The past two decades have rarely been smooth for Utilita and Bullen admits the company has stared into the abyss on more than one occasion, not least when the price cap for PPM customers was introduced in 2017. This was the recommendation of the Competition & Markets Authority (CMA) aer its two-year investigation into the energy retail sector. Bullen is scathing about the decision, which eventually led to Utilita threatening legal action against Ofgem, even if he agrees with key elements of the CMA's findings. "The whole thing around suppliers offering loss- leading tariffs for new customers and leaving existing ones on much higher ones was always going to end in tears. The big guys could do that because of their large incumbent base and that forced all the new entrants to compete at an unsustainably low price. The CMA rightly called that out." He adds: "The problem is the CMA didn't really do anything about the central problem. They just gave us a massive kicking because the only thing they decided to price cap was prepay." PPM customers have "always been used as a proxy for vulnerability", Bullen says, but he insists that the bulk of his customers want alternatives to direct debit. "Even some people that are vulnerable, even some

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