Utility Week

26 | 15TH - 21ST FEBRUARY 2019 | UTILITY WEEK Customers About 300 customers of default- ing energy providers have effec- tively slipped through Ofgem's safety net aer the supplier of last resort (SoLR) process was not invoked. Industry sources told Utility Week they had identified the "supplier-less" customers of companies that ceased trading but for whom the SoLR process was never invoked because of ENERGY About 300 customers 'slipped through Ofgem's safety net' arrangements made by the origi- nal supplier and the regulator. According to the sources the suppliers agreed to transfer their customers to a new supplier but not all were transferred. Utility Week understands the suppliers in question are Electraphase, Snowdrop Energy and URE Energy. Circulars produced last year by code administrator Elexon show these companies were in default of the BSC. URE Energy, which is being investigated by Ofgem aer failing to pay its Renewables Obligation payments on time, was found to be in default on 28 November 2018. Meanwhile Snowdrop was found to be in default on 19 October and Elec- traphase on 9 August last year. While Ofgem would not This week First suppliers raise bills in line with cap Eon and EDF Energy hike prices raising fears of a 'domino effect' among energy companies Eon and EDF Energy have become the first suppliers to announce a price increase in line with the new level of the price cap on default tariffs. Eon announced its rise on 11 February. From 1 April, the typical annual energy bill for the 1.8 million customers on its standard variable tariff (SVT) will rise by £117 – or 10 per cent. According to Uswitch.com, the tariff will be £286 more expensive than the cheapest deal on the market. EDF Energy announced its hike the following day. Its 1.3 million customers will typically pay an extra 10 per cent from 1 April. An Eon spokesperson said: "Over the coming weeks we'll be writing to affected customers explaining what the changes will mean for them and encouraging them to choose the best tariff for their needs." Responding to Eon's move, Alex Neill, Which? managing director of home services, said: "This hike in energy prices to the maximum level permitted by the price cap from April will be hard to stomach for more than a million households – particularly announced so quickly and when our annual survey shows Eon's customer service standards leave it languishing towards the bottom of the table of suppliers." A spokesperson for EDF Energy said: "As a respon- sible and long-term business, it is important that we reflect the costs we're facing" Rik Smith, energy expert at Uswitch.com, com- mented: "EDF Energy is the second of the big six suppli- ers to increase their prices, and we wouldn't be surprised to see a domino effect with other energy companies following suit." AJ ENERGY Energy price cap 'could fall in October' The level of the energy price cap looks set to decrease in October, according to research from con- sultancy firm Cornwall Insight. Wholesale costs were largely blamed for the rise of £117 for the default cap but, the consul- tancy firm claims, with whole- sale costs beginning to drop, the price cap could fall by about £50 in the next adjustment. This is assuming wholesale costs remain at the same level the market experienced at the end of January. Robert Buckley, head of retail and relationship development at Cornwall Insight, said: "Despite the upward movement in the cap, wholesale prices have been falling and this could impact the next change to the cap. "Should such a trend con- tinue, forecasts from Cornwall Insight show that almost half of the increase arising from today's announcement could be erased in the October readjustment." The new level will come into effect on 1 April. WATER Water bills to rise by 2% for second year The average household water and sewerage bill in England and Wales for 2019/20 is set to rise by 2 per cent for a second year. Bills will be £415 on aver- age – a below-inflation rise of £8 compared with the figure for last year, Water UK confirmed. The trade body said water companies in England and Wales will invest more than £8 billion this year – the investment comes in the fih year of a £44 billion spending commitment from 2015 to 2020. The investment is expected to cut 370 million litres a day of leakage from pipes, ensure nearly 5,000 fewer properties will be flooded with sewer water and 50 beaches are cleaner. Water UK said the change to average bills was within the context of an overall cut of 5 per cent in real terms between 2015 and 2020 as part of five- year plans confirmed by Ofwat in 2014. What customers end up pay- ing will vary depending on their supplier and individual circum- stances. The average bill will change by less than inflation for the sixth year in a row and by 2025 there will have been over a decade of falling bills, Water UK suggested. Water companies are also on track to deliver on a five-year commitment to provide financial support to an extra one million people (459,000 households) by 2020, with all companies having social tariffs in place to provide reduced water bills for custom- ers who struggle to pay. The Consumer Council for Water has urged the industry to increase its funding of finan- cial assistance for low-income customers. It also acknowledged that in "most cases" companies will either cut bills or increase them below inflations. Neill: price hikes will be 'hard to stomach' confirm which suppliers are con- nected to the unaccounted-for customers, it said: "All of these customers are on supply and will continue to be on supply. "Our current understanding is that the outstanding cus- tomer transfers are now being progressed and we're actively working with key industry stake- holders to ensure that no cus- tomers have been overlooked."

• Cover