Utility Week

Uberflip 15 11 13

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

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Customers This week Ofwat vetoed a rise in bills to finance scheme, but costs will go forward to next price control Customers will still pay for super sewer Ofwat has acknowledged that Thames Water customers will still pay for the Thames Tideway Tunnel, although it rejected the company's application for an immediate rise in consumers' bills. Sonia Brown, Ofwat's chief regulation officer, told UtilThames Tunnel: costs are already racking up ity Week she expected costs associated with the super sewer to emerge as part of the company's business plan for the next price control. Last week, Ofwat made a final decision to reject Thames Water's application to add 8 per cent to annual household bills in 2014/15. Thames said it needed to increase bills because of costs associated with the private sewer transfer, bad debt and the costs of land acquisition for the Tideway Tunnel. Land acquisition will cost the company £268.2 million, Ofwat has estimated. The water company can still appeal to the Competition Commission and said it would "review the decision carefully". Brown defended Ofwat's decision to launch a consultation on whether it could deduct further gains from the water company through the "substantial favourable effect" mechanism. "Because Thames came forward saying it wanted to look at costs, we are now saying: 'OK but we want to look at the benefit side associated with this.'" Brown said Ofwat was sending a message to water companies that it was possible to invest in infrastructure without increasing bills. CM Energy Credit balances must be refunded quickly Climate change minister Greg Barker has called on energy suppliers to ensure their direct debit customers are not "being unknowingly ripped off". At a meeting last week, Barker asked major suppliers to work with the government to ensure customers are not being overcharged via direct debits. At the request of the Department of Energy and Climate Change, Energy UK has agreed to develop direct debit best practice proposals. Suppliers have also been asked to provide information about how they currently deal with credit balances, and how much of their customers' money they hold at any one time. Richard Lloyd, executive director at Which?, said: "Some energy companies already automatically refund even very low credit balances, so there's no reason why the entire industry can't follow suit." Water Pay for social tariffs with cross-subsidies Water companies should be allowed to fund social tariffs through cross-subsidies from other parts of their businesses, according to Ofwat. The regulator has released guidance confirming how it expects water companies to allocate cross-subsidies for social tariffs and surface water drainage concessions in PR14. Ofwat said companies had the option to offer social tariffs (reduced charges for individuals who would otherwise have difficulty paying their water bills) or reduced charges for community groups known as "surface water drainage concessions". The Flood and Water Management Act 2010 lets companies in England and Wales make up the cost of these reduced charges by charging other customers more. However, they are not obliged to introduce social tariffs. Electricity UKPN plans faster grid connections UK Power Networks plans to speed up connections to the grid in 2014 in a bid to raise customer satisfaction ratings across the business by 5 percentage points to 82 per cent. The distribution network operator aims to cut the average connection time for homes and businesses from 50 days to 42 days across its London, South East and East of England regions. If the job involves multiple connections, the target is 53 days, down from 62 now. The number of jobs is increasing by 15 per cent year on year. I am the customer Andrew Buckley Thirty of Britain's largest energy customers have given evidence to the Associate Parliamentary Group on Energy Costs on the effects of rising energy prices, security of supplies and the impact of government legislation on their businesses. They are all members of the Major Energy Users' Council, which also expressed concerns about business' future ability to compete in a global marketplace when energy costs in the UK were significantly higher than "Our competitors outside the UK have lower costs" elsewhere throughout Europe. Chaired by Lord Palmer, this was believed to be the largest and most influential meeting of major energy consumers ever held in the House of Commons. Among the blue chip organisations taking part were Network Rail, Enterprise Inns, BT, Hanson, British Polythene, Asda, Thames Water, Belfast Harbour Commission and representatives of Britain's local authorities. A key issue expressed by many was how businesses could be expected to compete in the global export market. They made it clear they were facing major challenges trying to win business when their competitors based outside the UK had much lower operating costs. Lord Palmer told the meeting: "It's vital that our senior politicians take on board the pressure on major energy users and the impact on the cost of living." There are practical steps government can take to help UK business and the Major Energy Users' Council is discussing these in Whitehall. Andrew Buckley, director general, Major Energy Users' Council UTILITY WEEK | 15th - 21st November 2013 | 25

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