Utility Week

Utility Week 11th October 2013

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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Page 23 of 31

Customers This week Bad week for Thames Water as it receives low Ofwat SIM score and loses appeal against fine Thames rated lowest for customer service Thames Water has received the lowest points for customer service from industry regulator Ofwat. The water company scored 63 out of 100 in its service incentive mechanism (SIM) statistics for 2011-13. After Thames Water, the companies to receive the lowest Thames HQ: time to reflect score were Southern Water and South East Water – both with 64 points. Wessex Water was the highest scoring water and sewerage company, with 85 points. The industry average was 76. Thames Water customer service director Natalie Beckerman said: "We are not yet where we want to be, but we have made major improvements over the past year towards getting our customer service in a much better place." Ofwat will use the scores in the three years 2011/12, 2012/13 and 2013/14 to penalise or reward firms during the price review next year. Penalties could amount to 1 per cent of companies' regulated turnover, while rewards could total 0.5 per cent of regulated turnover. The scores are intended to provide the companies with information to factor into their business plan for 2015-20, which will be sent to Ofwat in December. The scores are measured on a water company's customer service performance annually, including the number of complaints it receives and how satisfied customers are with how their contacts are handled. Each company is given a score out of 100 depending on how well it does. The companies publish this SIM score each year alongside other performance information. CM Water Thames must pay more for sewer saga Thames Water has had an appeal rejected and been forced to pay more compensation to victims of sewer flooding in what the Environment Agency called a "ten-year litigation saga". The water firm was appealing against fines totalling £204,000 imposed in 2011 by Bromley Magistrates' Court, for letting raw sewage flood homes, gardens and a local stream in south London in 2003. The court found that Thames failed to take steps to bring the situation under control and that there had been previous sewage flooding affecting residents. The Environment Agency said Thames Water went to the High Court three times and the European Court of Justice once, to "try to escape legal liability". Apart from the fines and compensation totalling £208,015, Thames was ordered to pay another £206,000 to cover the agency's legal costs. Thames Water said: "We deeply regret any impact on our customers or the environment." ENERGY Businesses 'will save £1.5bn from freeze' British businesses will save £1.5 billion as a result of an energy price freeze, according to Labour leader Ed Miliband. Miliband announced Labour's initiative to freeze energy bills for 20 months, if they win the general election in 2015, at the party conference in Brighton last month. He claims 2.4 million businesses would benefit from the policy. Miliband said: "For too long, energy companies have been able to overcharge people as a result of a market that's not working. "When wholesale prices go up you pay more, when wholesale prices come down you still pay more. "Labour will call time on that and sort out the energy market." ENERGY First Utility prices on ice for the winter First Utility has pledged that it will not increase its energy prices for its customers for the whole of the winter. The promise will ensure that the supplier's variable tariffs will not see any increase in standing charge or unit rates until spring at the earliest. The guarantee comes after it emerged that the six major suppliers are expected to increase their prices in the coming weeks. Ian McCaig, chief executive of First Utility, said: "As the largest UK independent, we believe we have a responsibility to loosen the hold the big six have on the UK energy market." I am the customer Steve Hobbs Producing outcomes acceptable to a high proportion of customers has to be the result of any regulatory price review before it can be considered a success. Challenging water companies to develop business plans that reflect customers' expectations on prices and services has been the focus of CCWater's involvement in PR14. While there is still a long way to go, there are encouraging signs this could be the most customer-focused price review to date. "Will customers accept companies' plans?" But will customers accept the packages companies have drawn up? Companies are conducting research to test how acceptable their proposals are to customers. CCWater has worked with companies to help ensure this research follows good practice. So what would constitute a high level of customer accept- 24 | 11th - 17th October 2013 | UTILITY WEEK ability? CCWater commissioned research to find out what customers think should be the benchmark figure. Most said companies should ensure at least 70 per cent of customers accepted their business plans. The research also confirmed our view that companies should understand why some customers rejected the plan and take action to address concerns. The water industry needs to improve customer perception of value for money, so companies should rise to the challenge of producing plans that customers accept. The future legitimacy and sustainability of the water sector cannot be secured without customers buying in to what companies want to deliver. Steve Hobbs, senior policy manager, Consumer Council for Water

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