Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
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26 | 18th - 24th April 2014 | UtilitY WEEK Customers This week Price freeze threat 'scares off ' entrants Association for the Conservation of Energy says change being consulted on is 'bad for consumers' Labour's proposed energy price freeze has scared off more than one potential new entrant to the energy supply sector, accord- ing to independent consultancy Cornwall Energy. In a letter to shadow energy secretary Caroline Flint, manag- ing director Nigel Cornwall stated that a number of prospec- tive new entrants "are now reconsidering their position as a result of the proposed price freeze". He said: "Smaller players without direct ownership of flexible generation are facing greater risk regarding how they can price into the market." Director of Cornwall Energy Robert Buckley told Utility Week that more than one company had been dis- suaded from entering the market due to Labour's plans. Ann Robinson, director of consumer policy at Uswitch.com said at least two suppliers that were inter- ested in joining the UK energy retail sector had since changed their minds due the proposed freeze. She said two foreign companies "were thinking of entering the market but they changed their minds on the back of what Ed Miliband had to say". Robinson added that new entrants, as well as the existing smaller suppliers, were still building their customer bases, were unable to buy on the long term forward markets, and were "more subject to any fluctua- tions in wholesale prices". She said if smaller energy suppliers were not able to change prices in response to major changes in the wholesale price, "they'll go bankrupt". MB EnErgY Switching fault costs British Gas £5.6m British Gas has been made to pay £5.6 million for switching errors, Ofgem announced last Thursday. The regulator found British Gas Business had incorrectly blocked businesses from switch- ing and failed to notify custom- ers their contract was due to end. Between 2007 and 2012, 5.6 per cent of objections the supplier made to non-domestic customers seeking to switch were invalid. British Gas has paid nearly £1.3 million to affected custom- ers. It will put a further £3.45 million into an energy efficiency fund to benefit micro-businesses and pay an £800,000 penalty. Sarah Harrison, Ofgem senior partner in charge of enforcement, said: "In these cases British Gas Business failed these consumers who were wrongly blocked from switching, many of them small businesses, and denied others the chance to switch to a better deal at the end of their contract." British Gas said the errors were caused by problems in its computer systems. EnErgY Ofgem to toughen three-week rule Ofgem is proposing tougher rules to help enforce the three- week switching requirement for domestic energy customers. The energy regulator is con- sulting on new rules to change licence conditions so it can use enforcement action. In December it revealed that more than 20 per cent of electricity and more than 80 per cent of gas switches in the domestic sector were taking longer than three weeks. Current rules rely on consum- ers taking action if they are not transferred to their new supplier within three weeks of making their switch, following a 14-day cooling off period. The consultation closes on 12 May, and Ofgem hopes to have the new rules in force by August. EnErgY 72pc of customers would leave big six Almost three-quarters of domestic energy customers would switch to a smaller supplier, according to research by Uswitch.com. The survey revealed that 72 per cent of customers would be happy to move to a supplier outside of the major six suppli- ers, up from 56 per cent last year. Almost 78 per cent of custom- ers would consider switching away from a big six supplier to get a cheaper deal, while 22 per cent said they would move for better customer service. The number of consumers who said they would stick with their supplier because they were happy with them fell to 19 per cent, from 22 per cent last year. Energy price risk becoming too hot to handle I am the customer Melanie Kemp "Under My Electric Avenue, we'll drive all-electric cars" My street in Marlow has become the UK's first road of electric cars. Myself and eight neigh- bours will drive all-electric Nis- san Leafs for 18 months under the My Electric Avenue initiative. Project lead EA Technology and project host SSE Power Distribution will monitor and control the electricity demand arising from charging the cars, to learn about managing the local electricity network as electric vehicle sales rise. In particular, the companies want to learn how ies of Nissan Leafs, charging points and equipment that monitors and controls charg- ing. Other residential clusters include Chineham, Chiswick, Lyndhurst, South Gosforth and Wylam, and two more in South Shields. In addition there are two workplace-based clusters: Slough Borough Council and Your Homes Newcastle. More information is available at www.myelectricavenue.info. Melanie Kemp, participant in the Marlow trial to prevent underground cables, overhead lines and substations being overloaded so they don't need to dig up the roads to install higher capacity electric cables. The Nissan Leaf is the perfect car for short and medium length journeys. It's also incredibly cheap to recharge, with running costs of just 10-15 per cent of our diesel car. I'm delighted to be part of this trial; it's already showing that electric vehicles are an ideal form of transport today, and they are likely to become even more popular as their tech- nology develops in the future. Marlow is the first of 11 "clusters" around Britain that are currently receiving deliver-