Utility Week

Customers UTILITY WEEK | 2ND - 8TH AUGUST 2019 | 25 Research from Uswitch.com has shown that millions of energy customers who switched to fixed deals in the wake of price increases last summer could face a total £426 million price hike over the next three months. The research claims bills for 1.6 million households will rise if they do not switch, as 276 fixed- price energy deals come to an end between July and September. ENERGY Summer 2018 switchers 'face price hike' as deals come to an end Uswitch said the average increase will be £269 per house- hold as they are automatically rolled onto default standard variable tariffs (SVTs). The price comparison service pointed out how 13 price rises in the space of three months last summer added an average of £71 onto the bills of more than nine million customers – prompting 1.5 million to switch between July and September. Following the introduction of Ofgem's revised price cap, which was increased by £117 to £1,254, Uswitch says 44 energy companies have already increased the cost of their SVTs by up to 17 per cent. Regulator Ofgem is expected this month to announce the price cap will decrease by around £80 on 1 October. This week Scottish Power loses 120,000 customers Company also reports a drop of 71 per cent in EBITDA in its liberalised business for Q2 2019 Scottish Power has reported a year-on-year loss of 120,000 customers and a drop of 71 per cent in earnings before interest, tax, depreciation and amortisa- tion (EBITDA) in its liberalised business. Releasing the figures for its second quarter, Scottish Power revealed a fall of £117 million in EBITDA for the liberalised business, which comprises largely its retail arm, to £48.8 million. Customers stood at 4.75 million, compared with 4.87 million in Q2 2018. The energy giant blamed a milder winter and the default price cap, which was introduced on 1 January, for the impact. However the returns for SP Energy Networks were "on target" as the business delivers the RIIO-ED1 distribution investment programme, which runs until 2023, and the RIIO-T1 transmission investment programme until 2021. EBITDA for SP Energy Networks was £417.2 million, a 4 per cent increase of £17.3 million. Meanwhile, Scottish Power Renewables saw its EBITDA increase by £8.2 million to £213.4 million. This was due to higher energy prices compensating for lower wind volumes in the second quarter. Commenting on the results, Scottish Power chief executive Keith Anderson said: "A milder winter, in comparison to 2018's Beast from the East, together with the ongoing price cap, has impacted our liberalised busi- ness. But a positive performance in renewables and net- works at the mid-year reflects Scottish Power's sustained delivery of innovative and green investments." Peter Earl, head of energy at comparethemarket.com, said in June alone almost 11 per cent of all switches through the site were away from Scottish Power. AJ ENERGY Fewer customers and lower renewable generation at SSE Big six supplier SSE lost 70,000 domestic customers over the three months to the end of June, a trading update has revealed. The company ended the period with 5.71 million accounts. Nevertheless, SSE says its outlook for the year "remains unchanged" from the one given in May. This is also despite lower than forecast renewable generation. Renewable output over the quarter was 1,794GWh, with the shortfall equivalent to less than 4 per cent of its annual forecast. Furthermore, the company reiterated its intention to recom- mend a full-year dividend of 80p per share, in line with the five-year dividend plan set out in May 2018. SSE chief executive Alistair Phillips-Davies admitted the first part of the financial year has brought some "short-term challenges", but said the key months of the year lie ahead. He added: "I am confident we will make good progress in delivering against our strategic priorities, including the five-year dividend plan out to 2023. "The fact the UK has become the first major economy to legislate for net zero emissions by 2050 is a key development in the fight against climate change and reinforces SSE's strategic focus on regulated electricity networks and renewable energy, and our commitment to creating value through the low-carbon transition." SSE's pre-tax profits for 2018/19 saw a 38 per cent slump, to £725.7 million. ENERGY BEIS suggests new fuel poverty metric All low-income households living in inefficient homes should be included in the way fuel poverty is measured, the Department for Business, Energy and Industrial Strategy (BEIS) has proposed. In a consultation document released on 22 July, BEIS sug- gested several new amendments to its 2015 fuel poverty strategy. The document admits fuel poverty is a "significant challenge" and that although progress has been made, "more work remains". Under the new model, a household would be classed as fuel poor if the property has an energy efficiency rating of Band D, E, F or G, meaning disposable income (a«er housing costs and energy needs) would be below the poverty line. BEIS says the rationale is to reduce the "apparent churn in and out of fuel poverty" that is caused by the current metric, so that as action is taken to improve homes to an energy efficiency rating of Band C, the number of households in fuel poverty can be reduced over time. Anderson: 'sustained delivery' of innovation The cap is calculated months in advance, meaning current prices are based on the costs of buying energy between August last year and January this year. In response to the figures, a spokesperson for Energy UK said: "We would always advise people to check with their exist- ing supplier or shop around to see if they are on the best deal for them."

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