Thousands of Budget Energie customers were shocked in recent weeks when they heard how much they will have to pay for their energy each month. There are examples of people who saw their monthly amount increase from 200 to 800 euros within a few months. The price increase is a logical consequence of the rapidly rising electricity and gas prices, says CEO Caroline Princen of the Nuts Groep. Budget Energie is one of the brands under which the Nuts Groep sells energy to about 700,000 customers, making it the fourth largest energy company in the Netherlands.
Princen listened to the customer service stories last week. It gets flattened. “For some customers, this is a real problem,” she says. ‘We try to help those people as best we can.’
Increases from 200 to 800 euros are also very extreme. How is that possible?
‘We don’t really recognize increases from 200 to 800 euros. At least not for customers who have been on a variable contract for some time. It can occur in people whose permanent contract has recently expired. Until recently, they had a relatively favorable rate, then switched to a much more expensive rate and now receive a substantial increase on top of that. But on average, we have increased the monthly amount by 166 euros from September. Still a lot, but less extreme.’
The increases at Budget Energie are striking because since this year you have been adjusting the rate every month for variable contracts. While most other providers do that twice a year, so that increase probably won’t come until January. What is the idea behind monthly rates?
‘We had wanted to switch to monthly rates for some time. In the Dutch energy market, people can always switch to another provider. So if you buy energy for your customers for six months, you have a problem if the gas price suddenly drops in that six months. Then your customers will leave for other providers and you will be left with expensive energy. That is an irresponsible business risk.
‘At the beginning of this year, the gas price was already historically high and there was a great risk that the price would fall sharply in the spring. So from that moment on we started buying monthly for our variable contracts. This could have turned out to be advantageous for our customers if the price had fallen. However, due to the war in Ukraine, prices have not fallen, but have actually risen, so that unfortunately we have also decided to significantly increase the monthly advance. We are now the first to do so, but if these prices continue, the variable customers of other providers will have to deal with comparable prices early next year.’
The price you charge for gas increased by about 30 percent from August to September. While the advances have often become twice as high. How is that possible?
‘We start buying here two and a half months in advance. So our energy price for October is already fixed and it is already higher than the September rate. In addition, our rates are adjusted monthly, but we do not want to adjust advances every month. We therefore assume that the October rates will continue for the rest of the year. Then the monthly advance must now rise sharply for the coming months. If the price suddenly falls sharply, we will of course adjust the advances downwards.’
What is the October rate then?
‘I’m not going to say that yet, because we’re still doing some final calculations. It could be a few cents higher or lower than we think. But the bottom line is that the rate of gas will rise about 15 percent and that of electricity 20 to 25 percent. Our customers will hear the exact amounts next week.’
It is also difficult that you have to estimate how much energy customers will use in a month for the advance. This is normally based on consumption a year earlier. But if prices are as high as they are now, people will naturally cut back: lower heating, shorter showers. How do you handle that?
‘It is indeed difficult to estimate. Just like of course you do not know whether it will be a cold or a warm winter. We have a lot of internal consultations about such scenarios. In the first months of this year, we have seen that customers have started to use approximately 8 percent less gas due to the high prices. We now take that percentage into account. But the price is now much higher than it was this spring, so it is possible that people will consume even less.’
In any case, it is now about huge advances that people pay. Sometimes they can’t. What did you hear about this from customer service?
‘It is very busy there anyway, the waiting time is sometimes around three quarters of an hour. But we are still reachable. We are trying to understand where the problem is. Sometimes we can make an appointment, for example if people are unable to pay for a while because a washing machine has broken down. We will then make a payment arrangement. If the problem cannot be solved together, we refer to debt counseling. For example to Geldfit and municipalities.’