Utility Week

Utility Week 13th December 2013

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

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Page 19 of 33

Policy & Regulation Analysis No silver bullet on prices Even the industry can't agree how best to bring down energy bills. Karma Ockenden reports the findings of the latest Utility Week/ Accent Senior Executive Panel research. H ow to deal with high – unaffordably high for many – energy prices has already proved itself a thorny and emotive issue. As the winter sets in, the cost of energy will only get more contentious. Sadly for pol- iticians – even those trying to win votes on the back of seemingly tough policy – there is no silver bullet. We saw this last week when Chancellor George Osborne used his Autumn Statement to wipe £50 off annual household energy Intervention options How much do you agree with the following possible interventions in the energy industry: Ed Miliband's post-election price freeze 0 20 40 60 80 100 0 20 40 60 80 100 0 20 40 60 80 100 60 80 100 60 80 10% 90% Remove green levies from energy bills 0 20 40 0 20 33% 40 33% 34% 100 Remove fuel poverty levies from energy bills 33% 55% 12% Introduce windfall tax on energy profits 33% 61% 6% Remove VAT from energy bills 39% Key Strongly agree/agree 18 | 13th - 19th December 2013 | UTILITY WEEK 50% Strongly disagree/disagree 11% Unsure spend through the lifting or spreading out of levies currently recouped through energy bills, specifically the Energy Company Obligation. This brought an – albeit muted – welcome from some quarters, while others criticised the effect on fuel poor households. The Guardian reported the following from Fuel Poverty Action's Clare Welton: "Osborne is axing insulation for tens of thousands of the poorest households, condemning thousands of families to cold and damp homes with unaffordable high bills for decades, whilst allowing the big six to continue their profiteering just a week after a huge rise of deaths from fuel poverty have been reported." This split reaction is echoed even within the utility industry. Utility Week and research partner Accent asked our Senior Executive Panel – comprising energy and water bosses and other senior industry figures – for its views on energy prices and political intervention. Consensus on any sort could only be reached on a couple of issues. The price of energy First we asked if energy prices were unjustly  high. There was a relatively even split with 39 per cent answering in the affirmative and 44 per cent in the negative. The rest were unsure. In support of the yes vote, one executive says: "There are many games played by the  energy companies moving profits between the different parts of the business and there is very little transparency on their margins. There are no doubt significant investment requirements to develop sustainable energy sources but they [energy firms] are hiding behind this argument to do very nicely." On the other hand Steve Johnson, Electricity North West chief executive, believes: "Prices reflect wholesale prices, green levies and transportation costs. Greater clarity in the makeup of the price will help." Exactly half of our executives believe political intervention of some kind is needed to reduce energy prices for all. One sug-

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