London gets 'first not-for-profit energy provider in more than 100 years'

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A north London council claims to have launched the capital's first not-for-profit local energy provider in more than a century, saying the new scheme will help the poorest families.

Islington Council – which is controlled by Labour – has invested £100,000 in setting up and marketing the company, called Angelic Energy.

The announcement came after energy watchdog Ofgem told gas and electricity firms they must intervene earlier to help those in debt.

While the number of customers owing money has decreased, the number of pre-pay customers repaying larger bills was not dropping fast enough, it said.

The watchdog yesterday warned the big energy companies, including British Gas and SSE, that they face a regulatory crackdown if they do not move faster to take customers off the worst-value tariffs,

Islington Council said their new provider was aimed at helping those living in poverty, particularly those using pay-as-you-go meters, which can charge customers more than fixed-rate deals and drive vulnerable people deeper into poverty.

Around 20 per cent of households in Islington use pay-as-you-go meters, rising to 40 per cent of those in social housing, the council said. Meanwhile a fifth of households live in fuel poverty.

The borough has the third-highest level of child poverty in the country, at 36 per cent, despite its reputation of being wealthy, it said.

The new company — set up in partnership with Nottingham City Council's flagship energy company, Robin Hood Energy — claimed to save people hundreds of pounds on their annual energy bill.

Councillor Claudia Webbe, Islington Council’s member for environment and transport, said: “For years, inflated energy prices have forced thousands of people across London into fuel poverty, with catastrophic consequences for their health and quality of life.

"Too many are forced to face the question ‘heat or eat?’.

“Children brought up in fuel poverty also do worse at school and college, so helping current and future generations to stay warm and well is an absolute priority for us."

She added: “With Angelic Energy, Islington is leading by example in London, taking practical steps to drive down fuel poverty and encouraging people to make the big switch."

It is thought that a nationwide cap on energy prices, which was promised by Theresa May in early October, is unlikely to come into force before winter.