Utility Week

Uberflip 24 01 14

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

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Page 10 of 31

Policy & Regulation This week Network firms defend record on restoring power Electricity Good Energy gets but concede customers were not kept informed tariff reprieve DNOs admit to failures in communications Network bosses admitted to failures in communication with the 750,000 households that suffered power cuts over the Christmas period, in a grilling by MPs on Tuesday. Fledgling plans to set up a single emergency power cuts helpline drew scorn from the Down and out: storms knocked out power lines energy and climate change committee, after it emerged the networks could not be sure of providing correct information in the first place. The heads of five distribution network operators acknowledged communications as a weakness, as they fended off charges that they had been too slow to restore power to some households. The Energy Networks Association estimated that 93-95 per cent of customers were reconnected within 24 hours. Tim Yeo, chairing the committee, accused the witnesses of "utter complacency" and said it was "absolutely typical of a monopoly". At the end of the session, he said: "I have heard nothing at all that reassures me you are taking this problem seriously enough." It followed an admission from Basil Scarsella, chief executive of UK Power Networks, that when the next storm hits "I don't think we are in a position today to guarantee that every customer will be able to get accurate information in terms of timing of reconnection". Andrew Wright, interim chief executive of Ofgem, disclosed that he was among the victims and lost supply for 20 hours on Christmas Eve. "My own personal experience is the quality of information provided to customers left a lot to be desired," he said. MD Good Energy has been granted a temporary exemption from Ofgem's Retail Market Review (RMR) rules for a tariff linked to its Delabole windfarm. Ofgem has granted the supplier a two-year exemption from RMR rules that bar discounts other than for dual fuel or online account management. The derogation will last until 16 January 2016 and will allow Good Energy to continue to offer customers on the Delabole local tariff a £50 discount if the windfarm exceeds its target output. A spokesperson from Good Energy welcomed the move but said it wanted the tariff to be permanent, and wanted to roll out similar tariffs for other schemes, and therefore wanted to consult with Ofgem about the issues as soon as possible. Electricity Union plea to save Eggborough jobs Trade union heads are seeking an urgent meeting with energy secretary Ed Davey to save 850 jobs at Eggborough power station. The Yorkshire coal plant, which accounts for 4 per cent of UK power generation, is set to close by the end of 2015. Plans to convert it to run on biomass, at a cost of about £750 million, were axed after the government said last month it was rationing early approval for subsidies. GMB and Unite said that unless the government reversed the decision, 850 employees and thousands of supply chain workers would lose their jobs. Phil Whitehurst, GMB national officer for engineering construction, said: "It is a viable generation facility if converted to biomass. There are foreign investors interested, but without the biomass subsidies the investment will not happen." Energy Breaking up big six will push up prices Breaking up vertically integrated energy companies could make energy more expensive for the consumer, according to the energy secretary. Speaking at oral questions last week, Ed Davey said separating vertically integrated companies "has real problems". Responding to a question from shadow energy minister Tom Greatrex, Davey said separating the retail and generation arms of the energy companies "might work but it could end up pushing prices up". He said Ofgem's market maker obligation was the best way to reform the wholesale market and encourage new competitors into the sector. Political Agenda Mathew Beech PM David Cameron hinted to MPs last week that houses directly affected by fracking could get cash payments as a form of compensation. This comes on top of the community benefits that have been called "cheerleading" for the shale gas industry and "bribes" for residents, or as the government may say, suitable benefits for hosting fracking wells. Whatever way you look at it, one thing is clear – the Tories are "going all out for shale gas". "Tories say shale could solve the cost of living crisis" Cameron and chancellor George Osborne want this fracking revolution to happen because they believe it could provide an answer to what Labour has labelled the "cost of living crisis" – bills going up; wages going down in real terms; and households struggling to pay bills. And despite figures from HM Treasury – GDP rose to its highest level in eight years – shadow chancellor Ed Balls claimed "for millions of people across the country still seeing prices rising faster than their wages, this is no recovery at all". But the Conservatives hope the solution is tucked away under vast swathes of the UK. If fracking proves to be economically viable – and Osborne and Cameron are doing all they can to ensure it is – the Tories believe it will bring down energy bills while also generating up to 70,000 jobs. If, and it still remains quite a big if, the Tories can pull off a fracking double, they would be able to look back at Miliband's promised price freeze as nothing more than a minor irritation as bills fall and the economy grows on the back of shale gas success. UTILITY WEEK | 24th - 30th January 2014 | 11

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