Energy suppliers turned off by 'Big Switch' scheme

Critics say Which? plan is unfair and will boost organisation's profits

More than 250,000 people have signed up to get cheaper home energy deals through collective bargaining. But the "Big Switch" scheme set up by the consumer group Which? could fail because rivals have accused the organisation of using the scheme to boost its profits.

Meanwhile, several energy suppliers – including two of the six biggest companies – have ruled themselves out of becoming involved, and a rival scheme was yesterday launched by the price comparison website Energyhelpline.

Which? reports today that a quarter of a million people have signed up to its campaign and 1,000 more are doing so every day. It plans to hold a reverse auction on 26 April, when energy firms can bid for the business, with the lowest bid winning.

But five energy companies have said they will not take part, including Scottish and Southern Energy and smaller suppliers Ecotricity, Good Energy and Ovo Energy. On Thursday, British Gas added itself to that growing list as it accused the Which? proposals of not being simple, transparent and fair for all customers. It said the deal could mean below-cost pricing for new customers and that some customers would be excluded from taking part.

It also claimed Which? was not being transparent about the money it will make from the Big Switch. The group plans to charge £40 a customer, about the same comparison sites charge. Critics point out that if Which? successfully gets a deal for the 250,000 households signed up to its Big Switch campaign, it will make £10m. But a spokesman for Which? said: "Estimations like this are unhelpful and misleading. At this stage it is simply not possible to know whether we will even cover our costs."

It criticised suppliers that have ruled themselves out of the negotiations. "If suppliers are not willing to engage with hundreds of thousands of potential new customers, it speaks volumes about why this industry needs urgent reform."

The comparison website Energyhelpline launched its similarly-named "Huge Switch" scheme yesterday, with a promise to undercut Which?'s fees.

Mark Todd, the director of Energyhelpline.com, said: "We agree with the concept of the Which? Big Switch but feel there are flaws. We have come up with a solution that would provide more choice and flexibility."

The site will tell people who sign up which is the best deal currently available. Cynics would suggest the move is designed to drive fresh customers to the website to increase profits.

British Gas said it would be prepared to talk to Energyhelpline. Ian Peters, the managing director of energy at British Gas, said: "We support the principles of collective buying and switching, but any new buying mechanism must be simple, transparent and fair."

This week, the Energy Secretary, Ed Davey, summoned utility companies, consumer groups, charities and the regulator, Ofgem, to a meeting about collective bargaining. "I want to make it easier for consumers to club together and use their collective purchasing power to get good deals on their gas and electricity," he said.