Resooma’s Response to the Energy Crisis

Since the beginning of the gas crisis last year, we’ve been keeping a keen eye on the energy supplier situation and have been sorry to see numerous suppliers go out of business. During this period, we’ve received a handful of similar questions by our customers, all relating to the gas crisis and how it affects them. We’ve answered all the main FAQs and how the energy crisis will impact our customers.

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Very briefly, what is the energy crisis?

The global energy crisis can be traced back to the beginning of the Covid-19 pandemic. Back in early-mid 2020, national and regional lockdowns saw gas and electricity usage plummet which led to a sudden price drop. Because of this, producers reduced their supply to match the decreased demand.

As the world started to open up again, demand recovered. However, because gas supplies were still so low, wholesale prices kept rising to well beyond that of pre-pandemic costs. This in turn has caused huge increases to what many customers are now paying for their energy. 

What is the price cap and who are Ofgem?

You’ve probably seen in the news that electricity and gas bills for a typical household will go up by £693 a year in April – a 54% increase. Ofgem is Great Britain’s energy regulator, meaning they’re able to set a price cap to protect customers from high energy prices. 

The aim of a price cap is to provide a base level tariff that any homeowner would land on when they move into a new home. Most suppliers will want you locked into a contracted tariff for a longer period of time – such as 12 or 24 months. However, it’s really important that you’re aware of the difference in price between a contracted tariff and the price cap (standard variable tariff), as the standard variable tariff will likely be cheaper than a contracted tariff.

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What does the increased price cap mean for Resooma customers?

Our current bills package customers who have SSE as their supplier will remain on their tariffs until June. The price of this tariff is locked in until June and offers pretty substantial savings compared to all other tariffs that are currently on the market. 

In the next few months, we’ll be working with SSE and other suppliers to make sure we have an excellent tariff to move our customers on to, once this current tariff expires.

It’s a similar story for some of our other customers who are with suppliers on standard variable tariffs, such as Scottish Power and EDF Energy. Again, these are much cheaper than any tariffs currently being offered by suppliers. When the standard variable tariff price increases in April, the energy unit rates for these customers will increase accordingly.

And what does this mean for new customers?

As of 15th February 2022, we’ve updated our energy changes to match the new standard variable tariff which will come into effect in April, in order to provide certainty and easier budgeting for renters. As Resooma is a bill aggregator with our partner Billing Better, we’re in a good position to negotiate preferential rates with energy suppliers. We anticipate that we’ll be able to bring the unit cost down ahead of the summer. 

The new standard variable tariff that’s getting introduced equates to roughly 28p per unit for electricity and 7p per unit for gas. Put another way, the average two-bedroom home signing up to Resooma from today onwards will now pay £123.54 per month for their energy, rather than £99.90 per month.

How are students looking to get their bills set up for the summer going to be impacted?

We’ve received numerous enquiries from organised students who are looking to get their bills sorted for the summer. As we mentioned above, we’ve now updated our pricing which will be the worst case scenario energy pricing for the summer as it reflects Ofgem’s new price cap.

Our aim will always be to ensure that our customers are paying the best possible rates for their bills. So, when energy wholesale prices drop (this should be when temperatures start to rise over the next few months), we’ll be negotiating the best possible deals with all suppliers, in order to bring unit rates down below the new price cap.

So there’s no confusion, the quotes on our website reflect the worst-case scenario as it’s in line with the new price cap. If you sign up to Resooma today for your summer bills, then you’ll either pay what the price currently is or you’ll pay less if we’re able to secure a better deal.

The only situation in which your energy bill price would increase is if your usage exceeds the amount you’re paying for bills each month.

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What options do home movers have?

Unfortunately, suppliers aren’t currently allowing anyone to switch to them right now. This is because wholesale energy prices have increased beyond the price cap set by Ofgem. This means that suppliers would be losing money by taking on any new customers. That’s why you’ll see numerous comparison sites not showing any possible switches at the moment.

While we are seeing some signs of recovery – with Rebel Energy starting to take on new sites – we’d recommend consumers remain on a standard variable tariff and stick with your new supplier until wholesale prices drop.

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What’s Resooma doing to help customers with rising bills?

While the increased cost of energy and additional living costs that go with this are out of our control, we’re still doing what we can to help our customers. The measures we’re taking include:

Getting you on the best deal

Rather than recommend an expensive, in contract tariff which energy companies would stand to earn more money from, we’re ensuring our customers remain on standard variable tariffs with suppliers. 

One issue is a number of bill aggregators and package providers that are trying to put home movers and students under pressure to sign up for high price tariffs. They’re doing this with the knowledge that prices are likely to drop as temperatures rise and the weather gets warmer. If you think this applies to you, then stay vigilant!

Negotiating the best tariffs

We aim to get our customers onto the best possible tariffs over the coming months. It’s in our interest to ensure our customers are on the best available deals and for your bills to be as cheap as possible. As a bill aggregator, we’re able to negotiate preferential rates as we set up a large number of properties.

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Can we see a light at the end of the tunnel?

Well, yes and no. Wholesale prices tend to naturally fall in the spring as warmer weather means less demand for gas. There’s less reliability to this in 2022 though, thanks to political tensions between Russia and Ukraine, along with Brexit.

We hope that as wholesale prices drop, we’ll be able to negotiate some excellently priced new tariffs for all our customers. If all goes well, these prices will be lower than the new price cap. When this is possible, we’ll begin updating all our customers.

In the meantime, we’d recommend checking out our guide on energy-saving tips to try and reduce your bill costs.