Customers Experience of Natural Gas. in Northern Ireland. Our mission is to make the consumer voice heard and to make it count.

Transcription

1 Customers Experience of Natural Gas in Northern Ireland The Consumer Council n energy transport water educatio Our mission is to make the consumer voice heard and to make it count consumer support money affairs June 2012

2 Contents Page Foreword 4 Background 5 Competition 6 Choosing natural gas 9 Satisfaction 11 Billing and payment methods 13 Value for money 15 Information 17 Safety 18 Sustainability 19 Dealing with complaints 20 Customer knowledge of gas industry structure 23 Consumers representatives 24 Conclusion 25 Recommendations 26 Methodology 27 Service Providers 28 This publication is available in the following formats on request: Braille CD/Audio format Large Print 3

3 Foreword Background Northern Ireland (NI) has had experience of natural gas for 16 years. Today there are many people who believe that it can provide a stepping stone to a carbon free renewable energy industry at a price that is affordable to consumers. With such high expectations for the industry, the Consumer Council (CCNI) wanted to find out from consumers their experience of using natural gas. In 2000 and 2002 CCNI undertook a survey of domestic natural gas customers to find out their experiences of using this then relatively new fuel 1. Ten years on with natural gas a more common heating fuel, CCNI has again surveyed consumers to see if the experiences, attitudes, perceptions and concerns of domestic gas customers in NI have changed. This report details the views of 250 gas customers 2 across NI who were surveyed and two discussion groups that were held in Belfast and Londonderry in Where possible, we have compared these to the results of our surveys in 2000 and We are pleased that consumers overall impression of natural gas is a positive one. However, the problems customers have experienced in getting complaints resolved and the slow development of competition shows that there is no room for complacency. Whilst this report is mainly concerned with consumers experiences of converting from oil to natural gas, we also wanted to capture the views of customers about the impact of competition, particularly in the areas where customers are able to switch their gas supplier. If gas is to be the fuel that moves NI to its renewable energy future, it must remain affordable, maintain standards where they are good and improve them where they fail to meet customers expectations. We hope that this report will prove useful to natural gas companies, NI politicians, consumer representatives and all those who wish to see how the natural gas industry is matching up to customers expectations. The natural gas industry was introduced to Northern Ireland (NI) in 1996 with the construction of the Scotland to NI pipeline (SNIP). Initially the use of natural gas was restricted to the Greater Belfast area and by 2000, 48,000 households in this area had connected to gas. In 2002 the North-west pipeline was completed to take gas from Belfast to Derry and in 2006 the South-north pipeline from Belfast to the Republic of Ireland was completed. These pipelines brought gas to a number of towns along their routes (the Ten Towns 3 ). The original network that covers Greater Belfast and Larne has been extended into parts of North Down and the Ten Towns of Londonderry, Limavady, Coleraine, Ballymoney, Ballymena, Antrim, Craigavon, Armagh, Banbridge and Newry. By 2010, the gas network had extended further into County Antrim, Derry and further into North Down. Natural gas has increased its use in homes from four per cent of homes in 2001 to 15 per cent in Today there are almost 140,000 households throughout NI using natural gas to heat their homes. However, the network still only covers the main urban areas and in locations adjacent to the routes of the large gas transmission pipes. Most households in NI do not have access to natural gas as the network is limited in its geographical extent - The NI Assembly is currently considering extending the gas network in NI. This has the potential to bring gas to a further 31,387 customers at a cost of 162 million. Even in Belfast with the most extensive and dense gas network, there are many pockets of households that cannot connect to gas. Along with the existing and potential extensions of the gas network and the increase in the number of households using gas, the most significant development since 2002 has been the introduction of competition into the domestic market in Belfast and Larne. Initially Phoenix Natural Gas 5 (PNG) was the sole supplier of gas in the Belfast market. However, by November 2010 competition for domestic customers in Belfast began in earnest when firmus energy launched into the market. Firmus energy was already supplying gas to customers outside Belfast and Larne without competition and continues to do so. Antoinette McKeown Chief Executive Officer, The Consumer Council 1 Gas Watch Consumers Experiences of Natural Gas in Northern Ireland, General Consumer Council for Northern Ireland, Autumn The total of 250 customers was split between 200 Phoenix Supply customers and 50 firmus energy customers. 4 3 Londonderry, Limavady, Coleraine, Ballymoney, Ballymena, Antrim, Craigavon, Armagh, Banbridge and Newry NI House Condition Survey (Northern Ireland Housing Executive). 5 In line with the requirements of the Second EU Gas Directive 2003/55/EC, Phoenix legally separated its gas trading and supply division, Phoenix Supply Limited (PSL) from its transmission and distribution business, Phoenix Natural Gas (PNG) on 1st January

4 Competition Competition in the domestic natural gas market has only very recently appeared and is confined to the Greater Belfast area only 6. Phoenix Supply Limited (PSL) still has by far the largest number of domestic customers 7 and because it has such market dominance, its pricing is regulated by the Utility Regulator (UR). In contrast, firmus energy, having only recently entered the Belfast market has a much smaller market share and sets its own pricing. In order to attract customers, firmus energy is currently undercutting PSL by 10 ten per cent. Table 1: Customer awareness of alternative suppliers other than their current gas supplier. If PSL loses a substantial amount of customers in Belfast, either to firmus energy or a new competitor, the UR may decide the market is sufficiently competitive to remove all price control from the supply end of the market. Previous users of home heating oil will be familiar with the concept of a range of competing suppliers. As only Greater Belfast and Larne currently have more than one gas supplier, it can be assumed that awareness of alternative suppliers and the benefits of competition would be greater there because of competitive advertising through billboards and face to face selling. However, although unable to switch supplier, gas consumers outside Belfast could become aware of alternative suppliers within NI through media coverage and advertising in the regional media. Clearly with competition being such a recent phenomenon, consumers were not surveyed on this issue in 2000 and In our latest survey we wanted to test natural gas consumers awareness of alternative gas suppliers and their willingness to switch supplier. Over a fifth of gas users surveyed named firmus energy as an alternative to their current supplier, whilst less than a fifth mentioned PSL as an alternative to their current supplier. Over half of the gas customers surveyed were unable to name another natural gas supplier to the one that already supplies them. Based on 250 gas customers. Some of those surveyed gave more than one alternative supplier. Interestingly only 15 per cent of gas customers said they would switch if it were possible to do so, whilst over half said they would be unlikely to switch. Among those 37 people who said that they would switch if it was possible, 95 per cent were motivated by the possibility of a lower price. Comments made at the Belfast consumer panel reinforced a sense of apathy towards switching and was accompanied by a feeling of mistrust of advertising claims: Firmus has just come in recently but I haven t really looked into it, but I should. I don t know, my next door neighbour just recently switched. I don t think that 7.5 % (discount) for me is enough to switch. I am happy with the service that I am receiving and I think that s not enough of an incentive for me to say I will switch. I d like to hear one of my friends who has changed, somebody I knew rather than a TV ad telling me it s 7.5% cheaper. 6 Firmus entered the Greater Belfast domestic gas market on 1 October PSL supplies more than 90 per cent of customers and more than 80 per cent of demand. Energy Report 2011, Utility Regulator. 6 7

5 Choosing natural gas Even within the area where firmus energy supplies gas exclusively, there was some awareness of competition elsewhere and also a sense of frustration with the lack of competition. The following are comments from the Derry consumer panel: I think firmus energy has frozen their price until October and Phoenix has put theirs up because I heard that first on the TV ; We have no other competitor, firmus energy is the only gas we have here Table 2: Reasons for switching amongst those likely to switch if they could. If it was cheaper 95% Unhappy with current supplier 3% For better customer service 3% Other 3% Don t know 0% Despite natural gas having almost trebled in the number of people using it since 2002, it is still only used by 15 per cent of households in NI compared with 68 per cent of households that use home heating oil. We wanted to know what motivates people to convert to natural gas. There is a considerable upfront cost to convert a house from oil heating to natural gas. Both PNG and firmus energy provide cash incentives to convert but at an average cost of around 3,000, it is a large financial commitment for consumers to make. The most popular reason given for converting their homes to gas is that it is more economical. It appears that many consumers who have converted have picked up on the fact that natural gas is cheaper to use than home heating oil and that despite the large initial investment required, the payback period for investing in the conversion can be less than three years. Consumers are also aware that gas is easy to use as there is nothing to store or carry. Unlike home heating oil and coal, there is no need to arrange a home delivery which can in some cases mean taking time off work and can cause some inconvenience for the household. An example of this was given by a member of the Belfast consumer panel, who said: At my last house, because it s a terraced house they couldn t get it out the back so I had to bring the actual oil through the house, it was a nightmare. If he was coming I had to book the day off. Almost a third of customers surveyed also said that a reason for installing gas was that it provided instantaneous heat. Table 3: The most popular reasons for having natural gas installed. Based on 144 gas customers. Some gave more than one reason. 8 9

6 Satisfaction Both PNG in Belfast and firmus energy elsewhere in NI provide cash incentives to encourage customers to switch to gas. The incentive in Belfast includes free connection to the network and provides different amounts of cash back for the installation of gas appliances, depending on the householders age, personal circumstances or the type of heating to be replaced. This can amount in some cases to an incentive worth over A participant in the Belfast consumer panel explained how the incentive influenced their decision to convert to gas: I hadn t any central heating and Phoenix had an offer worth 400, so that s why I decided I would take it. Ever since natural gas was introduced to NI, it has been the policy of the Northern Ireland Housing Executive (NIHE) and other social landlords to convert their properties to natural gas where possible. This is particularly the case within the Ten Towns licence area where firmus energy has targeted social housing for gas conversions. In 2000, 17 per cent of gas users actually stated that they had no say in whether the house was converted to gas 8. This social housing policy remains an important reason why many householders are gas users. However, the experience of inheriting a gas heating system has now extended into the owner occupied and private rented housing sectors. Today 128,000 properties in Belfast have either been built with gas installed or been converted to gas by their owners. When these properties change hands, the new occupier inherits the system. In the Belfast group discussion, it emerged that the majority of participants had inherited their gas system when they moved into the property. This is clearly not seen as a drawback in a potential new home. Personal or second hand experience of gas is increasingly leading consumers to see the existing installation of gas in a property as a positive factor. The following was said at a consumer panel: I had a rented property before I bought my own house. So whenever I was going through the process of buying a house I was quite keen to get a house with gas, so I was lucky that the area that I was buying in did have gas piped in. So it definitely was a decision in buying the property. CCNI research in 2000 and 2002 showed that consumers were satisfied with many aspects of their natural gas experience. This has continued and our research shows that overall satisfaction with natural gas is high. During our consumer panels there was not only a high degree of general satisfaction with natural gas but some participants expressed real enthusiasm for it. The following comments were typical: I am happy with the overall convenience of it and basically the speed at which it heats your house and the constant supply of hot water as and when ; I wouldn t be without it; I wouldn t go back to oil. Here we look in more detail at specific areas of the customer experience and where possible compare it to the previous surveys in 2000 and Conversion and installation Conversion and installation are two distinct stages in a household moving from oil to gas and involve different providers of the service. Conversion refers to the process of getting the property connected to the gas network and is undertaken by PNG in the Greater Belfast area and firmus energy in the area of the Ten Towns. Installation refers to the process whereby the householder employs a gas plumber to install the appliances that will heat the home or be used for cooking. Before any of these activities take place the householder will be visited by a representative of either PNG or firmus energy to explain both processes and what the householder needs to do. These three stages dovetail each other. If a problem occurs in any one it will not only cause the customer to be dissatisfied with the organisation responsible but it will also damage the reputation of the gas industry as a whole. Overall satisfaction with the entire process of conversion and installation is quite high. Our research shows that in 2011, 68 per cent were satisfied and only five per cent of customers were dissatisfied. This is an improvement since 2002 when 19 per cent of customers were dissatisfied with some aspect of the process. 8 Gas Watch, Consumer Council

7 Billing and payment methods Discussion at the consumer panels was positive about the overall experience of converting to gas. The following comment from the Belfast panel is typical: No, it was all fairly straightforward - I mean it was a simple process and just a few phone calls. The vast majority of customers surveyed had never felt dissatisfied with the work or service received from the installer: They were there by 8 o clock in the morning and done by one o clock, it was finished by one o clock. They ripped out everything and put it back in again. However, ten per cent of customers surveyed for CCNI in 2011 had felt dissatisfied at one stage or another with the work of the installer. Table 4: Customers who were dissatisfied with the work of the installer. The billing and payment methods that are available can be a factor in whether a consumer chooses to convert to gas and where competition exists over which supplier they choose. The two gas suppliers in NI offer a wider range of billing and payment methods today than was available in Accompanying these are discounts related to different payment methods. The three most common payment methods used are: Pay As You Go (PAYG) The customer is issued with a card which they top up with credit at local outlets and then use the card to transfer that credit to the meter. Emergency credit is available in case a customer runs out of credit when the outlets are closed and this ensures that the customer continues to receive gas. There are two types of meters currently in use - the quantum meter and the libra meter. The libra meter only takes payment for gas, whilst the quantum meter takes payment for gas but in addition allows a customer who has arrears to pay a portion of the amount owed back each time they top up their card; Direct Debit The customer sets up a direct debit which automatically pays from their bank account either a set amount monthly or the actual amount of the bill quarterly; and Quarterly payment by cash, card or cheque The traditional method of paying the bill at the Post Office, bank, by post, by telephone or increasingly, online. A variation of this is when a card is issued to the customer that enables them to make payments, when they choose, towards the bill. They are not paying as they use gas but are able to spread the cost. The type of payment method used can also help a customer reduce their bill by reducing their gas consumption. On average, PAYG customers use far less gas than direct debit customers. The most common method of payment is by PAYG with 54 per cent of customers surveyed by CCNI in 2011 using this method of payment. This compares to 47 per cent who used the PAYG method in our 2000 survey. Supply In 2011, 93 per cent of customers surveyed had never felt dissatisfied with the work or service received from their gas supplier, while six per cent had felt dissatisfied at some stage. This is an improvement, as in 2000, 11 per cent were dissatisfied with the supplier and by 2002 this had risen to a 17 per cent dissatisfaction level. The use of PAYG meters in NI is much higher than in the rest of the UK. In 2011, only 13 per cent of gas customers in England used the PAYG meter, whereas in the Ten Towns (firmus energy) licence area of NI, 85 per cent of domestic customers now use PAYG 9. In the rest of the UK, prepayment meters are associated with low income households. This is not the case in NI where they are recognised across all social and economic groups as being a convenient payment method and valuable budgeting tool Utility Regulator, Retail Energy Report

8 Value for money The second most popular payment method in NI is direct debit. Looking back at the research carried out by CCNI, direct debit increased dramatically in popularity from two per cent in 2000, to 37 per cent in This had fallen back by 2011 to 21 per cent. Compared to England, where 55 per cent of customers are on direct debit, the use of direct debit in NI is low. By 2011 the customers surveyed expressed a high level of satisfaction with their chosen method of payment. However, satisfaction with payment methods has slightly decreased over the years. In 2000, 75 per cent of customers were very satisfied with their payment method but this had dropped to 68 per cent by On the other hand, those who were fairly satisfied had increased from 13 per cent in 2000 to 26 per cent in Comments from the consumer panels support this: I am happy enough, I think there is a lot of options out there payment wise. I maybe should compare paying monthly or paying quarterly direct debit. Of the people who were using the PAYG method in 2011, 69 per cent were satisfied with it. A consumer commented: I really wanted it because it means you don t have a big bill. It is a handy system. It s not like if you were still on oil you d have to pay 500 or 600. Although overall satisfaction with direct debit is high, our surveys detected a recurring theme from 2000 to now. This is that direct debit customers are unhappy with only receiving one bill a year and that this leads to a loss of control over the customers gas account: I would also ask for quarterly bills rather than them hanging onto my money, you know, I think you need to know more than once a year how you stand with people. Receiving frequent bills increases consumer awareness of their consumption and provides them with the information that they need to control their energy use and plan their spending. Direct debit customers consume much more gas compared to PAYG customers. CCNI has been asking for more frequent billing for direct debit customers since We are pleased to note that since January 2012, PSL has been required to undertake four meter readings a year for its direct debit customers. However, they still only produce an annual statement of account. 14 We know that the main reason why consumers choose to convert to gas is its economy and efficiency. We wanted to find out if consumers experience of using gas justified their decision to convert. NI has the highest level of fuel poverty in the United Kingdom. The number of households in fuel poverty here has been steadily increasing since In 2001, 27 per cent 10 of households were in fuel poverty and by 2009 the figure had risen to 44 per cent 11. With the large price increases to all domestic fuel since that time, the current number of households struggling to pay their fuel bills probably exceeds 50 per cent. Table 5: Fuel Poverty levels in Northern Ireland, Great Britain and the Republic of Ireland % of Households in % of Households in Fuel Poverty Extreme Fuel Poverty Northern Ireland Great Britain 13 4 Republic of Ireland 19 Not Available Current data shows that households here using natural gas spend on average over 1,000 a year less on heating than those households using home heating oil. Therefore natural gas could have a significant role in reducing the levels of fuel poverty that exist in NI if accompanied by improved energy efficiency. Table 6: Average annual fuel bills Northern Ireland 12. Heating source Heating cost Electricity Total Fuel Bill (3,300kWh per annum) Gas (Ave consumption , ,232kWh) Oil (Ave 500L x 5.50) 1, , Difference 1, , NI House Condition Survey (NIHE) NI House Condition Survey (NIHE). 12 Power NI, Phoenix Natural Gas, firmus energy, Sutherland tables and the Consumer Council. Note: Gas heating cost based on a weighted average between suppliers in Greater Belfast and Larne (March 2012). 15

9 Information Almost seven out of ten consumers said that the cost of running gas is either much or a little better than their previous fuel - this view continues a trend from the earlier surveys. In 2002, one third of customers said the cost of gas was less than they had expected and there are a number of reasons why this could be the case. As the natural gas system will have been installed relatively recently, it is far more likely to be using a modern, efficient condensing boiler than if the fuel was oil. Furthermore, a recently installed gas system is more likely to have sophisticated controls, such as zonal control, and to be accompanied by energy efficiency measures. Typical comments from the consumer panels were: I don t really have a problem with the bills now I just pay quarterly bills, no direct debits or anything like that but I think I would say it is good value from my point of view. I was paying nearly 75 a week for electric for Economy 7, now I am only paying a tenner a week on gas. Consumers need clear information to help them make the right choices and to enable them to get the best use out of the products and services they are paying for. We heard evidence at our panels that some consumers will be unfamiliar with how a natural gas system works and how they can get the best from it. My friend got it on Monday and she asked me the same thing, what do you do and how do you use it? She hasn t a clue either, she says what s all these units mean, she hadn t a notion, they showed her nothing, they came and put it in and left. Installers vary in the information that they provide. Comments from our consumer panels suggest that social housing tenants often receive the best information and advice but this is inconsistent and may depend on the housing office: During the consumer panels the view was put forward that gas is not cheap but it is cheaper than oil. In fact, statistically gas is cheaper than oil but it may be that the individual circumstances of each consumer may lead them to this opinion. This view may reflect the widely held opinion that the cost of home energy is expensive, whatever fuel is used, but that gas is the least expensive of the available options. It is also the case that any increase to the price of gas is widely publicised as it generally happens once or at most twice a year. The price of home heating oil changes on a daily basis across over 300 suppliers in NI and it is not so much in the public eye unless the media takes a particular interest in it: I don t find it that cheap actually to be honest with you no, no I don t. It is cheaper than oil mind, I think personally. The servicing of gas appliances ensures that the appliance is running at optimum efficiency, maximises the lifespan of the appliance and ensures that the appliance is safe. The latter is an important issue with gas as, along with all fossil fuels, it produces deadly carbon monoxide when burned. We consider consumer views and experiences in relation to gas safety later in this report. A lady came round the housing estate to the properties that got it installed and she says this is where you adjust your outside thermostat, if you top up, this is what you do. In the absence of information to guide them, gas consumers run their heating systems in different ways which can result in big differences in running costs. There was no clear view from participants at the panels which was the most efficient way to run their gas system and most used trial and error. More information needs to be provided at the point of installation that will show customers how to get the best from their new system. The point of installation is also an ideal opportunity to provide information and advice on energy efficiency measures and the availability of grants to assess the energy efficiency of the property and to identify vulnerable and fuel poor households. It is recommended that all gas appliances are serviced at least once a year for safety purposes. The cost of servicing appliances is therefore something which is essential rather than just desirable and must be considered in the overall cost of using natural gas. In fact, almost half of consumers surveyed said that the cost of servicing is much or a little better than their previous fuel source

10 Safety Sustainability Gas is safe to use if managed properly. However, gas safety is a very important issue as the hazards associated with natural gas are potentially very serious. Gas leaks can result in a fire or an explosion while incorrectly installed or poorly maintained gas appliances can produce poisonous carbon monoxide. Even so, by 2011 gas customers did not express strong concerns on the relative safety of gas compared to other fuels. More than two out of five stated safety with natural gas is either much or a little better compared to their previous fuel type, whilst almost three in ten believed it to be no different. Concerns with safety have lessened a little since 2000/02 when mixed views were expressed about the safety aspect of gas. This may be attributable to the fact that by 2011 gas is a far more commonly used fuel but it may also be that people who have the most concerns about gas, choose not to convert to gas and therefore have not been included in any of the surveys of natural gas customers that CCNI has undertaken. Typical comments made at the consumer panels relating to gas safety involved the awareness and dangers of carbon monoxide poisoning. Consumers here have identified responsible consumerism and sustainable development as important issues for them 13. Natural gas is a fossil fuel and like all fossil fuels produces carbon dioxide when burnt. However, compared to coal and oil, natural gas produces less carbon and therefore has less impact on the environment than other fossil fuels. More than three in five current users of natural gas thought it to be more environmentally friendly than their previous fuel type. However, over a fifth of customers did not know if gas was more environmentally friendly than their previous fuel. Furthermore, the impact on the environment was not mentioned at all as a reason for converting to gas and did not come up as an issue for participants in the consumer panels. Two thirds of gas customers were aware of the gas emergency telephone number. Awareness was higher among women, older people, lower social groups, social housing tenants and tenants in the private rented sector. A possible explanation for this is that in rented accommodation (including social housing), the landlord has a statutory responsibility to get an annual boiler service and provide the tenant with a gas safety certificate Consumer Council s Corporate Plan

11 Dealing with complaints Knowledge of how to complain and getting the right outcome is important to consumers. Research shows that customer service is the most frequently cited criterion used to judge organisations 14. With the advent of competition in the domestic natural gas market in greater Belfast, we would expect to see suppliers placing a greater emphasis on customer service. Table 7 below shows the number and type of complaints about natural gas made to CCNI between April 2009 and March Overall the number of contacts CCNI received on natural gas between 2009 and 2011 dropped. However, customers are still not happy with the way that complaints are being handled by gas companies. Our surveys show that consumers dissatisfaction with how complaints were dealt with both during and after installation has increased marginally since 2000/02. At both earlier dates around 40 per cent of customers who had a complaint remained dissatisfied. In contrast 53 per cent of customers were dissatisfied in The 2011 survey looked at this issue in more detail and distinguished between complaints about installation and complaints about the supplier. Table 7: Natural gas contacts made to the Consumer Council Issue Total Billing Metering Supply Communications Appliances Initial connection to supply Carbon reduction measures Complaints about installation Of those people surveyed, 14 (10 per cent 15 ) were dissatisfied with some aspect of the installation, compared with 20 per cent in 2000 and Of the 14 customers who were dissatisfied with the service that they had received, 11 took the matter further. Of these 11, only three were satisfied with the way in which the complaint was handled by the company and seven people were dissatisfied with the way that the complaint was handled. Table 8 below shows how an improvement in the complaints handling process during installation between 2000 and 2002 has been lost as the numbers of customers who are dissatisfied with the handling of their complaint by the company has returned to its very disappointing 2000 level. Table 8: Satisfaction with the handling of complaints about installation. Level of satisfaction with Problems with installation complaint handling Satisfied 26% 38% 27% Neither/nor 6% 7% 9% Dissatisfied 66% 34% 63% Don t know 2% 21% 1% Of the 14 people who felt dissatisfied with the complaints handling process, six of them contacted the installer directly with the issue, five went to the gas company and two did not contact anyone. A comment from the consumer panels: The fella from customer service phoned me back and says I will get it sorted for you, now they came out that afternoon and did a wee bit but then left it again, so we were sitting for about 3 weeks. Safety of supply Supply (other) Price increase Statutory standards/charters Total Complaints about the supplier The vast majority (93 per cent) of those surveyed in 2011 had never felt dissatisfied with the work or service received from their gas supplier, while six per cent had felt dissatisfied. Of the 13 people who had felt dissatisfied, eight of them contacted their supplier directly about the issue. Source: CCNI 14 Consumer 2010, Consumer Council of the 250 consumers surveyed had personal experience of the installation process

12 Customer knowledge of the gas industry In both 2000 and 2002, of those customers who complained to their supplier, 40 per cent were dissatisfied with the way the supplier handled the complaint. By 2011 dissatisfaction levels with how the complaint was handled had dropped marginally to 38 per cent. Table 9: Satisfaction with the handling of complaints about supply. Level of satisfaction Problems with supplier complaint handling Dissatisfied 40% 40% 38% Of the eight people who contacted their supplier with their complaint, three were satisfied with the way in which the complaint was handled and three people were dissatisfied. Only a few participants in the consumer panels reported making a complaint to their supplier and were mixed on the company s response: The industry that supplies natural gas to homes in NI is split into two distinct parts, the network of pipes and infrastructure that physically delivers gas to the home (the transmission and distribution network) and the marketing and billing of the gas as a product and service (supply). When natural gas was first introduced to NI the distinction had little relevance to consumers. However, with the advent of competition in Greater Belfast in the supply side of the industry, it is important that the network operates and is seen to operate on an equitable and fair basis for all suppliers. In Belfast PNG owns and manages the distribution system whilst PSL buys and sells the gas. However, only 20 per cent of PSL customers surveyed were aware that the two companies have different roles and responsibilities. This finding confirmed earlier research by CCNI prior to competition starting in Belfast which showed that most consumers make no distinction between PSL and PNG 16. This is of concern as it will be a barrier to competition if consumers adopt the view that customers of PSL receive a preferential service from PNG, the network business. This was mentioned by a participant in a consumer panel during separate CCNI research into consumer protection measures in 2011: The girl couldn t have been any nicer on the phone trying to explain that you will get your money back but it could take anything up to six months ; That (PNG running the network) might put you off going with firmus for your gas because you might think, just keep it all at Phoenix because at the end of the day they are your supplier of gas. I think from when I phoned up until I received the cheque, it was four weeks, which I think is not acceptable to wait for money that you are owed Consumer 2010, Consumer Council. 23

13 Consumer representatives Conclusion The ability of consumers to have their complaints properly dealt with can be enhanced with the support of an effective representative organisation willing to pursue the complaint on their behalf. In addition, consumer organisations provide information and advice to consumers and lobby policy makers on their behalf. The importance of consumer representation for energy consumers is recognised at the highest levels of UK and European Government. We wanted to see how aware NI gas consumers are of different organisations that represent their interests. Respondents were asked who they would contact in the future if they had a complaint about natural gas. Just over half (52 per cent) said they would contact their supplier, next was the installer at eight per cent followed by five per cent who would contact CCNI. Ninety four per cent of gas customers regarded having an independent body to look after the interests of gas customers as important. The Citizens Advice Bureau was the most commonly heard of organisation with over nine out of ten aware of it, while almost nine in ten were also aware of the Environmental Health Department. Trading Standards Service was known by over four in five consumers surveyed and over three quarters of gas customers were aware of CCNI. Overall, gas customers are satisfied with the affordability, efficiency and convenience of gas. The number of customers who have had reason to complain is low. Most natural gas customers converted in order to save money and most have done so. Whilst overall satisfaction is high, the NI gas industry must not be complacent. Since 2000 the industry has failed to improve on the very low satisfaction with the way that it handles complaints. There is also work to be done by the gas industry to improve consumers awareness of how to get the best from their gas systems, safety issues and how to take advantage of competition where it exists. Natural gas is more affordable and produces lower carbon emissions than its main competitor, home heating oil. CCNI believes that natural gas can play an important role in tackling fuel poverty and could be a stepping stone to a fossil free energy industry in NI. Having listened to consumers, CCNI has compiled a set of recommendations for the natural gas industry here. (See next section). The natural gas industry in NI is regulated by the UR whose role is to scrutinise and authorise the costs of the gas companies in the absence of effective competition. A quarter of the consumers surveyed were aware of the UR. Table 10: Customers awareness of consumer representative organisations

14 Recommendations Methodology 1. Gas safety information should be made available at all contact points with customers; 2. The gas industry should take steps to make the benefits of competition and the structure of the gas industry widely known to gas users in NI; 3. Gas companies should provide a step by step guide for new customers on how to use their gas appliance s efficiently and the responsibilities of the installer, gas companies and the customer; 4. Providers of social housing should ensure that all their tenants receive guidance on the efficient running of their gas system; 5. In closing complaints, gas companies should routinely advise their customers of the Consumer Council s role; 6. In light of the high level of dissatisfaction in the way that complaints are handled, gas companies should review their complaints procedures; 7. Gas suppliers should take action to identify the cause of complaints about billing and take action to rectify them; and The 2011 research consisted of a consumer survey conducted by Millward Brown and also two consumer panels recruited by them and conducted by CCNI. The survey was carried out by telephone and was made up of 250 households that use natural gas and represented a cross section of age, gender and socio economic grouping of 50 households in the firmus energy licence area and 200 households in the PNG licence area. The consumer panels took place in Derry and Belfast. Consumer surveys were also carried out in 2000 and The sample size in each case was approximately 500 households using natural gas. Respondents were sampled to represent the range of age, gender and socio-economic groupings of the wider community. Respondents were asked a range of closed and open questions in a one-to-one interview that took place in their own homes. While many questions were identical, the questionnaire varied slightly between the 2000, 2002 and 2011 surveys that reflected changes in the growing gas market. Three focus groups were held in 2000 and in addition, questions were included in two omnibus surveys. 8. Installers should have a customer complaints procedures and gas companies should encourage installers to become a member of a professional trade organisation, such as the Scottish and Northern Ireland Plumbing Employers Federation or the Chartered Institute of Plumbing and Heating

15 Service Providers Notes Phoenix Natural Gas Tel: Emergency Tel: Fax: Minicom: Web: Phoenix Supply Ltd Tel: Fax: Minicom Telephone General Enquiries: Web: firmus energy Switching enquiries: Tel: Text phone/minicom Web: Gas Safe Register Tel: Web: The Consumer Council has developed a Gas Price and Service Comparison Tool to help consumers find the best energy deal. This can be found on the Consumer Council website at

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17 The Consumer Council Elizabeth House 116 Holywood Road Belfast BT4 1NY Complaints line: Tele/Textphone: Fax: Websites: Consumer Council Northern Ireland ConsumerCouncil