Utility Week

Customers UTILITY WEEK | 16TH - 22ND NOVEMBER 2018 | 27 Ofgem has announced it has given the modification of the supplier of last resort (SoLR) arrangements the green light fol- lowing a statutory consultation. An open letter written on 5 November by the regulator's head of industry codes and licensing, Lesley Nugent, said Ofgem has decided to modify the gas and electricity supply licences as set out in the formal ENERGY Ofgem approves supplier of last resort licence condition changes licence modification notices. The modifications will take effect 56 days from the notice of the letter. The proposed changes aim to enable a potential SoLR to recover costs associated with honouring credit balances for customers who switched away from the failed supplier shortly before or at the date of failure. Present arrangements do not allow appointees to recoup these costs. Other changes will ensure claims for credit balances repre- sent the actual amounts owed to customers by the failed supplier, and the timings for making a claim will be more flexible. Ofgem received six non- confidential responses plus one confidential response during the consultation. It said it recognises several respondents "continue to have concerns". This week SSE and Npower retail merger delayed Companies agree to enter into negotiations on adjusting the terms of the planned transaction Adjustments are being made to the merger between Npower and SSE's retail arm due to "adverse developments in the UK market", Npower's parent com- pany Innogy SE has announced. News of the delay to the tie-up, announced aer markets closed on 8 November, caused SSE's share price to open 3.2 per cent down, at £11.45, the next morning. The development was denounced as a "shambles" by some industry analysts, who forecast it could throw the whole deal into doubt. However Alistair Phillips- Davies, chief executive of SSE, maintained it continued to believe that "creating a new, independent energy supplier has the potential to deliver real benefits for customers and the market as a whole" and that this remained the objective. Both companies have decided to enter into negotia- tions on adjusting the terms of the planned transaction to combine Innogy's British retail business with SSE's household energy and energy services business in Great Britain, as agreed in November last year. SSE said it is likely completion of the deal will be delayed beyond the first quarter of 2019, but all work to "seek to achieve the formation and listing of the new company will continue". Martin Herrmann, chief operating officer retail at Innogy, said: "Adverse developments in the UK retail market and regulatory interventions such as the price cap have had a significant impact on the outlook for the com- bined retail company. Together with SSE we have decided to enter into negotiations on adjustments of the terms of the agreement… including potential additional direct or indirect financial contributions by each party." AJ ENERGY Progress on fuel poverty is 'stalling' The government has been urged to focus energy bill subsidies for low-income and pensioner customers much more closely on fuel-poor households by its own statutory adviser. The latest annual report of the Committee on Fuel Poverty, published on 7 November, says overall progress on tackling the problem is "stalling". And it says there is mixed performance on the three main measures to track progress on the government's fuel poverty strategy for England, which the committee was set up to monitor and advise on. Despite rising energy bills, the aggregate fuel poverty gap has reduced by 7 per cent over the past four years, while the average mismatch for individual households has fallen to £326 per year, it said. But the report says that since the government introduced its strategy in 2014/15, the total number of fuel poor households has increased by 210,000 to 2.55 million. And with the Depart- ment for Business, Energy and Industrial Strategy reporting that progress on tackling the energy efficiency of fuel-poor homes has been slower than forecast, the committee estimates the funding gap has increased to £17.1 bil- lion, compared with £15.4 billion in its 2017 annual report. Longer-term plans for house- hold energy efficiency set out in the Clean Growth Strategy could provide up £6.1 billion of fund- ing, the committee estimates. But these longer-term plans are counterbalanced by the additional £2.8 billion the com- mittee says the Treasury must supply to meet the strategy's milestone that as many fuel-poor homes as possible should reach energy performance certificate bands E and D by 2020 and 2025 respectively. ELECTRICITY EV charging plan for businesses unveiled Renewable energy company Tonik Energy has unveiled an end-to-end electric vehicle (EV) charging plan for businesses and the public sector. According to Tonik, the plan combines the installation of EV charging infrastructure on an open, subscription-free network, with ongoing support and maintenance. The service is not contingent on customers taking on Tonik's EV tariff Charge EV and was developed with technology com- pany The Phoenix Works. It has been designed to tackle two of the market's "biggest problems" – upfront costs and charger reliability. Tonik said it wants to tackle the issue of EV charging system customers facing sizeable upfront costs, which it believes drives buyers to low-quality solutions, by offering a charging service plan from £1 a day, there- fore removing upfront costs. Phillips-Davies: continues to believe in the deal Supplier Npower said it was not supportive of the proposed changes and believes "addi- tional consideration" needs to be given about credit balances irre- spective of whether customers remain with the SoLR. The com- pany's regulation lead Matthew Keen said: "We believe there is greater merit in compensating customers who wish to move from a defaulting supplier."

• Cover