Big Six Info

Who are the Big Six?

They are:

EDF (parent EDF Group, French)
E-On (parent E-On Group, German)
N-Power (parent RWE Group, German)
Scottish Power (parent Iberdrola, Spanish)
British Gas (parent Centrica Group, British)
Scottish and Southern Energy (parent none, British)

Why should we be wary of them?

Because they all are trying to achieve perfect vertical integration. Now don't go to sleep yet! They rely on you having a nap whenever you hear a business term. It keeps you stupid which allows the slight of hand.
Put simply, a vertical integration strategy is a way of holding all the cards.
In very basic farming terms it means you own the land, sell yourself the manure from your own dairy, sell yourself seeds from last years crop, rent your own tractor to yourself, pay yourself to get the wheat in, pay yourself to drive it to your own bakery, pay yourself to bake it, pay yourself for the bags to put the loaves in, pay yourself to drive it to the supermarket (which you own) and pay yourself to sell it to the public. They also take it home in bags from your plastics factory.

Vertical = you own it from the bottom to the top!

WeAllSwitch.com believes that the Big Six energy companies are trying to own the whole process. Either individually or as an group. It allows them to make a profit at each step but also allows them to say things like "wholesale energy prices are high." We say "Well of course they are, you're charging yourself and each other quite a lot, aren't you!"

Here is an article from early 2008 which also gives a bit more information about how they operate.

Can you tell me a little more about each of them?

For the avoidance of litigation, I'll provide a link to a story about a few of them.

Here is one about Scottish Power's parent company Iberdrola. Pay particular attention to the information about "higher prices to end customers" and "access to the British market, where power prices are less regulated than in Spain."

Here is one about Centrica, British Gas's parent. The most interesting point to note is the profit of £5 million pounds a day.

A corker from E-On. More money for us??? No explanation required!

What is the real stand out story which will convince me to take a stand?

OK here's the "piece de resistance." A deal which has gone through which saw EDF buy British Energy. We'll let Gordon Brown introduce the transaction.

So OK, EDF has bought British Energy, formerly the UK's largest electricity producer. Gordon Brown thinks it's lovely.

Now, who else wants a slice of the pie? Oh, look who it is, it's Centrica (British Gas's parent company), they'd like to have a quarter of the action.

If the deal goes through, do you think that when British Gas buys their energy from British Energy they will be paying top dollar? It depends. Will they pay a big whack up front and tell us that wholesale prices are high and take the profit from British Energy later. Or, do you think they will buy it cheap and tell us that their stake in British Energy is proving to be not very lucrative and charge us a fortune to make up for it? Either way, make sure you turn down the thermostat!

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