Leadership Spotlight: Peter Connolly, chairman of Yorkshire Energy

Yorkshire Energy is a new energy provider based in Leeds which is hoping to lure frustrated customers from the so-called ‘big six’. Their chairman, Peter Connolly, spoke to Thomas Barrett about what sets them apart and why the energy sector is so mistrusted.

What does Yorkshire Energy offer that the ‘big six’ doesn’t?    

We set out to create a different kind of energy company with a different kind of team, one that combines private sector expertise with public service values.

Everyone at Yorkshire Energy wants to make a difference, but that doesn’t mean being disruptive. We’re taking a calm and considered approach. We’re small, new and nimble enough to adapt to change, and our collective experience means we can work smarter and faster, passing the savings we make onto our customers. We also want to educate people and help them become energy efficient on their own.

We’re united by the common belief that gas and electricity are more than just utilities. They have the potential to transform local economies and benefit entire communities. And because we’re locally owned, unlike ‘big six’ energy companies we have no overseas shareholders driving our business.

How will you avoid annual price hikes?

We have firsthand experience of just how unfair and complex the energy market can be. We’re never going to be the absolute cheapest, but we think we offer great value through our competitively priced tariff, and we’ll always aim to fall within the 10% cheapest for gas and electricity.

We’re quite open about this because being the absolute ‘cheapest’ means you are effectively buying your customers. And when you do that, you’re not really an energy supplier, you’re in the business of growing a customer base in order to sell your company.

This goes completely against what Yorkshire Energy is all about. We’re in this for the long haul.

How do you ensure customers are on the right tariff?

We only offer one fixed rate tariff at any one time, so our current tariff is always our best possible tariff. We pride ourselves on having one of the fairest, most competitvely priced tariffs available. We want all our customers to have the best value gas and electricity, so we keep a close eye on prices in the energy market to make sure we can get the best possible deal. And because we don’t carry the overheads or the same aspirations for profit as ‘the big six’, we believe can react quickly to fluctuations in the market. We’re able to smooth things out by purchasing wholesale energy ahead of time.

Why don’t more consumers switch their energy provider?

Many people feel like switching will cause more problems that it solves. They think it will take a lot of time and effort, and involve awkward conversations with their current provider.

Customers can be surprisingly loyal to energy companies. They think – why switch?

They worry that if they move to a new supplier who has no track record, then maybe they won’t be as reliable.

With the established ‘big six’, customers know they can ring somebody if something happens. They feel there is somewhere to go.

The perception of newer, independent companies is that you can’t get old of someone – but in reality, it’s quite the opposite.

By switching, there’s a good chance people will save money on their annual bills too, they just don’t realise it.

What is your opinion on the trend of council-owned energy companies?

By and large, we see them as a positive force. They exist to look after and serve their communities, something that’s very close to our hearts. We see gas and electricity as more than just utlities, they have the potential to transform local economics.

As a business, we already have strong links with universities, councils and various non-profits. We’re always looking for like-minded organisations to team up with, to help them meet their energy consumption needs and sustainability targets.

There’s certainly a role for council-owned companies to play in our experience, they just need to make sure their customer service matches their good intentions.

As the grid increasingly moves towards renewable sources, when will consumers see lower energy prices?   

Eventually, yes. But at the moment, renewables are firmly at the investment stage. In other words, they’re expensive, so it’s all about striking a balance.

We currently promise that for each kilowatt per hour of electricity use, we’ll buy the same amount from guaranteed renewable sources.

This electricity is Ofgem certified and has a Renewable Electricity Guarantee of Origin (REGO). Our proactive approach supports the generation of renewable electricity to ensure we do our part in protecting the environment whilst still being able to offer great value to our customers.

Further into the future, renewable energy should become cheaper than gas and coal and much cheaper than nuclear.

Why is the energy sector so mistrusted?

The general disillusionment in the industry stems back decades.

People slowly began to lose trust in once admired public companies who went on to increase their prices, charge large exit fees and on occasion, mistakenly bill customers more than once for the same thing.

The larger energy companies continue to get away with charging extortionate energy rates even to this day.

Not only have millions of customers endured years of paying through their noses for their energy, they often never fully understood precisely what they were paying for either.

Poor communication, unclear bills and an all-round lack of transparency have created a toxic culture of resentment around gas and electricity.

And because the sector hasn’t been forthcoming in explaining about switching, people mistakenly believed that price hikes were something they just have to live with. It’s imperative that people realise they don’t have to stick with the status quo.

There are other options out there, and we all have the right to challenge our energy suppliers to be more competitive.

Has privatisation of energy failed?

On one level, yes. Some of today’s bigger energy companies were once state-owned. They went through intense privatisation and huge numbers of people were locked into a very traditional model of energy generation, transmission and delivery.

Because of this, they’ve never been able to adapt and change quickly. They’re like oil tankers, taking an age to turn.

That’s why there’s such a renaissance happening right now. It’s a fantastic opportunity for independent companies to show there’s a better way. We’re the opposite of the giants from the past. We’re much smaller in size and have much lower overheads.

We’re also engaged in everything that’s going on in our industry, locally and nationally. We’re agile and can adapt quickly to rapid changes. So on another level, privatisation has become an unwitting catalyst in this second wave of fresh startups, which has granted us the freedom to do things differently.