Islington Council’s 3,000 Angelic Energy customers ‘at risk of price hikes’ in British Gas sell-off
- Credit: Archant
Concerns have been raised that 3,000 customers with Islington Council’s energy brand could be “at risk of sharp price hikes” when their contracts come to an end.
Angelic, a not-for-profit white label energy provider, was London’s first municipal energy provider in more than a century when it launched in October 2017.
It was set up to offer fair gas and electricity prices and to help vulnerable households on pay-as-you-go tariffs out of fuel poverty.
But Islington Council’s supply licence partner, Nottingham Council’s energy company Robin Hood Energy Ltd, sold its customers base to British Gas owner Centrica on September 3, and Islington’s 3,000 customers will now be transferred over too.
This comes after council leader Richard Watts encouraged residents to sign up for Angelic to avoid being “ripped off by the Big Six”, of which the energy giant forms a part.
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Islington Liberal Democrats criticised the council and questioned whether it should have ever have got involved in the commercial endeavour.
Spokesperson Kate Pothalingam said: “When Angelic Energy was established, Richard Watts described it as a ‘people’s energy company’ which would stop people being ripped off by the Big Six.
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“Now it seems that all the people the council encouraged to switch to Angelic will end up in the arms of the biggest of the Big Six.
“In the past, the council has claimed Angelic was a money-maker but what’s the situation now? Given the collapse can the council assure us that local taxpayers have not incurred losses?”
Six months after Angelic was set up, it emerged Robin Hood had made losses of £7.59 million the previous financial year, and questions were raised over what due diligence had been carried out - but Islington insisted its cheap energy tariff was safe.
A year ago, the Gazette reported Robin Hood’s licence could be revoked if it failed to pay £9.4 million in green subsidies by the end of the month.
At the time, a report for Islington’s environment and regeneration scrutiny committee stated the council would not reconsider its policy to encourage residents to switch energy suppliers to Angelic.
It said that “irrespective of the ongoing issue with Robin Energy, the council will keep highlighting the advantages of switching to other energy suppliers away from the ‘Big Six energy companies’”.
Islington Green Party councillor Caroline Russell questioned why the council continued to associate with Robin Hood despite “massive red flags” raised at scrutiny, such as the regulator fines last autumn.
“Islington Council has no power to prevent the transfer of their customers and more worryingly does not appear to be able to contact Angelic customers direct and is having to rely on its website to advise people of their options,” she said.
“People with good computer skills will switch to an alternative ethical supplier on a good tariff, but Islington’s many digitally-excluded residents who are Angelic customers are now exposed to the risk of sharp price hikes when their existing contracts end.
“This is going to require huge efforts on the part of the council to repair trust and ensure that no one using Angelic Energy is out of pocket in the long term from the switch to British Gas.”
The council told the Gazette it has not lost any money as a result of the sale, and any commission owed to Angelic Energy by Robin Hood Energy will be paid as per the contract terms.
A spokesperson said: “We are absolutely committed to continuing to help our residents secure affordable and greener tariffs on the energy market, and remain focused on securing the best possible value for Angelic Energy’s customers.
“We are carefully reviewing our options and are in discussions with Nottingham City Council and Robin Hood Energy.”
British Gas has promised to match or beat Angelic customers’ current tariffs and will honour existing tariffs for the remainder of their contracts.
A spokesperson from British Gas said: “When they come to the end of this tariff they will be offered another fixed term tariff and we regularly offer best buy priced tariffs.”
Customers who do not want to transfer to British Gas will be allowed to leave without paying exit fees.