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UTILITY WEEK | 23rd - 29Th MaY 2014 | 13 Policy & Regulation This week CMA probe must end penalty for being poor Competition body urged to put an end to 'scandal' of the poorest paying the most for their energy The competition regulator "must end the scandal of energy firms charging poorer customers more for their fuel", Citizens Advice has urged. The watchdog said a planned market investigation by the Com- petition and Markets Authority (CMA) must consider whether competition is working for peo- ple on low incomes, not just active consumers. Ofgem proposed the referral in March amid concerns the market was broken. It found incumbent energy suppliers were able to charge more to "sticky" custom- ers who did not switch and give cheaper deals to those who shopped around. A consultation on the scope of the investigation closes on 23 May. Gillian Guy, chief executive of Citizens Advice, told Utility Week: "If energy firms have effectively created competition deserts for groups of consumers because they regard them as less lucrative or less likely to switch, then that is a significant market failure." The comments coincided with the release of an Ofgem analysis showing customers on prepayment meters are charged around £80 a year more than direct debit customers. The regulator said it was "satisfied" the average difference in price, which had fallen from £140 in 2009, reflected the costs faced by suppliers. However, Conservative MP Robert Halfon, who has campaigned on the issue, disagreed. He tweeted that the £80 pound discount enjoyed by direct debit customers "is more a premium on the vulnerable and those who don't access bank accounts". JA ELECTrICITY Green subsidy errors cost Npower £1m Npower has been fined £125,000 for errors in reporting renewa- bles subsidy data, Ofgem announced on Monday. The supplier underreported the amount of electricity sup- plied to customers by 0.08 per cent in 2010/11 and 0.28 per cent in 2012/13. That meant Npower did not contribute as much as it was supposed to towards the Renewable Obligation and feed- in tariff (FIT) schemes. In setting the penalty, Ofgem took into account that Npower had identified and reported the error itself and taken steps to prevent it recurring. Npower has voluntarily forfeited Renewable Obligation Certificates worth £900,000 and will pay £63,000 to account for the FIT reporting error. These measures correct for the market impact of the misreporting. ELECTrICITY Tariff exemption for Good Energy Good Energy has received a sec- ond temporary exemption from Ofgem's four-tariff cap. About 500 customers close to the Hampole windfarm in south Yorkshire will be eligible for a 20 per cent discount off their electricity bills, and a potential £50 windfall payment. The exemption for the Ham- pole Local Tariff from the four tariff cap will remain in force until 2 June 2016. Maxine Frerk, partner for retail markets and research at Ofgem, said any potential det- rimental impacts "would likely be outweighed by the social and environmental benefits" associ- ated with the windfarm. The derogation followed a similar decision by Ofgem in January, which gave the sup- plier a two-year exemption for its Delabole Local Tariff. WaTEr EU must integrate water policy goals The EU must do more to success- fully integrate water policy goals into the common agricultural policy (CAP), a report has found. The European Court of Audi- tors said there were delays and weaknesses in the implementa- tion of the Water Framework Directive, the legislation that sets out minimum pollution maintenance requirements for water bodies in the EU by 2015. Currently, just 27 per cent of water bodies in England are in "good status" under standards set out in the directive. The auditors said the com- mission and member states should address the delays by "describing individual measures and making them sufficiently clear and concrete". Prepay meters: users pay £80 more a year Political Agenda Mathew Beech "A tumultuous background is scaring off investors" Speak to most people about the UK's energy policy and you are likely to be greeted with blank faces or a rant about energy prices going up. Speak to those in the sec- tor, or those with more than a passing knowledge based on newspaper front pages, and you can expect a puzzled response triggered by constant govern- ment tinkering with policy, or pained laughter at how the Lib Dems and Tories are bickering over what the policy should be. The result, Davey states, is the UK is an attractive place for investors to put their money. It is true one could argue that this is the case, but there is still a tumultuous background of coalition disagreements, Tory promises to cap onshore wind and Labour's price freeze wheeze – all scaring off investors to safer havens. So although the UK does have an energy policy, a stable energy policy beyond May 2015 is some- thing else entirely. And it seems that energy sec- retary Ed Davey is a bit touchy on the subject. On the back of a less than glowing report on UK energy policy in The Times – "Wanted: an energy policy" – Davey felt compelled to write to the paper. "This government is tackling the legacy of decades of under- investment," he wrote, singing the praises of the government's Electricity Market Reform policy that will "keep the lights on". Investment is up, new nuclear is happening [subject to EU state aid approval], more renewables, CCS, and a whole host of other goodies have been sorted out.