Speaking at the London launch of an initiative which he said had been ten years in the making, Mr Reid declared: “We are all very excited. To be in at the start of something as significant as this for the Co-operative Movement is a real privilege.
“Our vision is to be a significant player in this market, championing the consumer and sharing the benefits with our customers. We believe this is a winning combination.”
Mr Reid told journalists and energy industry analysts that the launch marked the end of the first part of a journey that started over ten years ago when a review of opportunities to extend the co-operative model, by Co-operative UK’s New Venture Panel, identified energy as the number one prospect.
He explained: “Since then we have undertaken several option appraisals, but not quite been able to find the right formula. But we now believe the time is right to launch this exciting venture.
“The resurgence of the Movement under its new brand and the greater awareness by the public of the co-operative business model has, we believe, created the right climate into which we can launch Co-operative Energy.”
Mr Reid said the favourable climate has been enhanced by the low esteem in which big suppliers are held by their customers and commented that he had been astonished to read in a recent survey, that energy suppliers were ranked as the least trusted by their customers — even below estate agents and bankers!
The recent Ofgem report, he said, had reinforced Midcounties’ view that the energy market needs to change and additional competition should be introduced.
“We intend to lead that competition,” said Mr Reid. “Co-operative Energy will provide the jolt to the market that Ofgem is calling for. We will be a new competitor that will look and feel different from the rest — a co-operative alternative; a competitor with a clear set of values and one that is owned by its customers, which will ensure that we respond to the issues that matter most to the users of our service.
“We will operate a simplified business model with just one tariff and complete transparency around pricing. Openness and democracy are two of the fundamental values of the Co-operative Movement and we will build this business on that platform.”
Mr Reid said research showed a significant number of Britain’s energy users will respond positively to the business model and predicted that the opportunity for members to share in the profits, plus the Movement’s reputation for ethical trading and a pledge to reduce the carbon content of energy supplied would provide a persuasive case for switching to Co-operative Energy.
He added: “Of course co-operative solutions to fundamental problems are not new. When the Co-operative Movement was first formed it was in response to a real desire by consumers to influence both the quality of and the pricing of basic foodstuffs.
“The Rochdale Pioneers were the visionaries that recognised that mood and the rest, as they say, is history. However if that same group of people, were with us today, it is unlikely that they would see food as the key issue. There is a high probability that energy would be at the top of their list.
“We are proud to think that we are following in the footsteps of our founding fathers and believe that they would recognise what Co-operative Energy is aiming to achieve — namely giving ownership of the supply of one of our basic needs to the people who use it. The initiative is a modern response to a modern issue and proves that co-operation is as relevant today as it was all those years ago.”
Co-operative Energy marked its public launch with a challenge to the industry to stamp out sharp practice and give all customers a fair deal.
The business has criticised the UK’s big six utility providers describing their multi-tariff offerings as “baffling and bewildering” and has promised to champion a fairer deal for customers.
Co-operative Energy promises not to ‘hard-sell’ customers. There will be no exit penalties for switching customers and consumers will not be locked into fixed-price contracts. The business will source electricity from low carbon generators, including renewables, and the aim is for the carbon content of their electricity to be less than half the national average by April 2012.
Co-operative Energy’s Nigel Mason said: “Customers have been bamboozled by complicated tariffs and confused by changing prices and unfair contracts, and it has to stop. We will set an example that will show the big six how it can be done better.”
• For details of Co-operative Energy call 0800 954 0693 or visit: www.cooperativeenergy.coop.