Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/327828
UTILITY WEEK | 13Th - 19Th JUnE 2014 | 25 Customers This week Ovo to pursue bonus despite Ofgem block Ofgem says the interest paid by Ovo is not compliant with its Retail Market Review reforms Ovo Energy is set to continue offering its consumers a credit bonus, despite the regulator blocking the current deal. A total of 83 per cent of Ovo customers have received the bonus payment, which pays con- sumers in credit an additional 3 per cent in interest. Last week, Ofgem said the bonus payment made by the independent energy sup- plier was not compliant with its Retail Market Review reforms, which only allow suppliers to offer discounts to consumers if they manage their account online or are dual fuel customers. "Ovo's offer of 3 per cent interest on direct debit credit balances is not compliant with our retail market rules to simplify the way discounts are offered," said an Ofgem spokesman, adding that prior to its reforms consumers said they found the way discounts were offered by suppliers "confusing". Ovo is set to apply for a derogation so it can continue to offer the deal and will continue to give custom- ers their money back. Jason Sharpe, customer service director at Ovo Energy, said: "For one reason or another, the way regulation is currently designed isn't always in the best interests of consumers. We start with what we believe works for our customers, and go from there." Ofgem confirmed that it is in discussion with Ovo over whether it is appropriate in this case to grant an exemp- tion from the rules to allow the supplier to continue to make interest payments on credit balances. "We will pub- lish a statement clarifying our position on this licence condition later this month," the regulator added. MB WaTER Financial incentives 'may need rethink' Financial rewards for water companies that outperform may need to be reconsidered, accord- ing to the chair of the Consumer Council for Water (CCWater), Dame Yve Buckland. Talking to Utility Week at the annual Institute of Water conference last week, Buckland said a lower Wacc, as proposed by Ofwat of 3.85 per cent – down from 5.1 per cent in the current cycle – was welcome as it would lead to lower bills. However, she said the way in which companies could make up the shortfall on allowed returns through financial rewards when they outperform targets, would not be welcomed by customers. "While we were happier with Ofwat's decision on a lower cost of capital, what remains uncer- tain is whether customers will react negatively if water compa- nies try to rebalance this through financial incentives," she said. Ofwat says companies will not get a reward for "simply doing their job", and argues if firms fall down on service, "they will be hit in the pocket". EnERgY Half of consumers distrust suppliers More than half of energy con- sumers do not trust any energy supplier, according to new research from the Smart Meter Central Delivery Body (SMCDB). The study, which was con- ducted by Populus and surveyed 10,000 people, revealed that 51 per cent of consumers did not trust any energy supplier. This lack of trust grew to 57 per cent for those with a disability or if they were living in fuel poverty. The survey also revealed 37 per cent of respondents were concerned their energy bills were not accurate, 41 per cent were worried they were pay- ing for more energy than they consumed, and one in ten did not know how much they were paying for energy. EnERgY Npower writes off old customer bills Customers who le Npower more than six months ago and have not yet received a final bill will not have to pay, said the supplier. The energy firm, which has had problems since implement- ing its new billing system, stated if a customer switched away from Npower before December 2013 and has not received a final bill, they will have nothing to pay, provided they did not have a previous debt with the supplier. This undercuts industry regu- lation, under which customers do not have to pay if they have not received a final bill within 12 months. Cleaning up: bonus for 83pc of Ovo customers I am the customer Alan O'Connor "Renewable energy could power whole data centres" Data centres consume enormous amounts of power and as more critical IT services move to cloud computing, consumption of elec- tricity in particular will increase. This will have a negative impact on the environment unless we can find ways of responsibly developing national infrastruc- ture using available renewable energy sources. Large consumers of data cen- tre space and in particular those within the financial sector have a preference for facilities located the race to reduce carbon emis- sions from facilities like it. AOC Group's Queensway Data Centre in Scotland should clearly demonstrate we can build criti- cal infrastructure like this in a responsible manner. The task now is to convince public and private enterprise their data can travel at acceptable speeds from a facility powered completely by renewable energy – just not necessarily on their doorstep. Alan O'Connor, group managing director, AOC Group close to their business hubs. Understandably, an important part of this is to reduce latency where seamless transactions are a crucial part of their business. But not all applications require the same synchronised data transfer, and with a growing network of advanced fibre in the UK, facilities can be located just about anywhere and remain only milliseconds behind some of the fastest connections in the world. Glenrothes would not have been an obvious choice for Scot- land's largest data centre – until one considered that tunnelling 50m to the country's largest bio- mass renewable energy plants would be a distinct advantage in