2nd Apr 2014 10:07
LONDON (Alliance News) - Energy company Flowgroup PLC Wednesday said it will launch a new fixed rate home energy tariff with the aim of winning new customers, after its initial campaign last year beat its expectations.
The company, which launched an energy business last year and is this year set to put a microCHP Flow boiler it has developed into volume production, said the new tariff from its Flow Energy business is competitive.
Last year, Flow Energy launched its so-called Thames Tariff and was hoping to gain 36,000 customer accounts so that it could test its systems and get brand exposure. It ended up registering 50,000 accounts, and those customers are generating annualised revenues of GBP30 million. It withdrew the Thames Tariff after the initial customer acquisition programme.
"Flow Energy is now re-releasing and extending the Thames Tariff, allowing customers to fix prices on the Thames Tariff until 31st August 2015, with the aim of both attracting new customers and retaining its existing customers," it said in a statement.
It said it had managed to maintain the original Thames Tariff pricing structure despite a rise in wholesale prices.
Flowgroup is one of several new entrants to the UK energy market in recent years. It is dominated by the "Big Six" energy suppliers including Centrica PLC's British Gas and SSE PLC. However, the big suppliers are facing potentially being split up after coming in for criticism from politicians and consumer groups for allegedly being quick to raise their prices when wholesale prices go up but slow to cut them when wholesale prices fall. They were also accused of racking up huge profits in recent years at the expense of consumers hit by the extended economic downturn that followed the financial crisis.
Last week, UK energy industry regulator Ofgem proposed that the Competition and Markets Authority investigate "once and for all" whether there are barriers to effective competition with the "Big Six" suppliers. Ofgem said growing profits, coupled with price hikes, have intensified public distrust of suppliers and highlight the need for a market investigation "to clear the air".
Flowgroup shares were up 2% at 37.975 pence Wednesday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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