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26 | 18th - 24th July 2014 | utIlIty WEEK Customers This week Ovo under fire over payment methods Rival Ecotricity claims Ovo has engineered its finances to saddle customers with its equity risk Ofgem has warned independent energy supplier Ovo that its cur- rent payment methods are not in compliance with its licence con- ditions, aer a scathing attack from rival Ecotricity, which claimed Ovo had engineered its finances to saddle customers with its equity risk. The regulator stepped in aer complaints from Ecotricity that Ovo's practice of taking payment at the start of the month, before energy had been supplied, was an anti-competitive advantage and posed a financial risk to consumers. "Ovo is using these upfront payments to fund operat- ing losses," Ecotricity founder Dale Vince said in a state- ment. "Over the past five years Ovo has accumulated a total loss of around £10 million, while its published accounts show no injection of shareholder funds or other equity. It appears that this £10 million has come from cashflow and since the company is loss-making, it is coming not from profit but from cash deposits. "The business model appears to be, sell power very cheaply – so cheaply that the company is loss-making – in order to attract customers at a ferocious rate, and use customer deposits to cover those losses." Ovo hit back, with chief executive Stephen Fitzpatrick saying in a statement: "We don't think it's in customers' best interests, we think it's poor regulation, but we will comply." Ofgem explained that once a supplier crossed the 50,000 customer threshold, it had to offer a wide range of payment methods, including cash on receipt of the bill. JA EnERgy Complaints double in first half of 2014 The number of complaints about energy companies doubled during the first half of 2014 to an all-time high, with big six suppliers Npower and Scottish Power receiving the majority, data shows. According to the Energy Ombudsman, 22,671 complaints were made in the first six months of 2014, more than dou- ble the 10,598 complaints made in the second half of 2013. The number of complaints in June was also a record high, soaring to 4,124, an increase of 215 per cent on June 2013 (1,307). The figures follow similar findings from Citizens Advice, which last week reported that the number of customer com- plaints made against Npower and Scottish Power had almost doubled year on year aer the introduction of new billing sys- tems at both companies. Scottish Power had 197.7 com- plaints per 100,000 customers in January to March this year, while Npower had 592.4 – this com- pared with between 34.1 and 84.5 for the other four of the big six. EnERgy 75% of tenants have never switched Three-quarters of tenants have never switched electricity or gas supplier and 20 per cent are not aware the option is available, data from Ofgem's 2014 Consumer Engagement Survey revealed. The survey shows that home- owners are almost twice as likely to switch to a different supplier than people who rent, with 26 per cent of renters having switched gas suppliers before, compared with 47 per cent of homeowners. The electricity figures were similar. The report suggests this may be due to renters wrongly believ- ing they are required to stay with the suppliers they are provided with when they move in. ElEctRIcIty WPD launches single number helpline Western Power Distribution (WPD) has launched a single emergency number for custom- ers across its four operating areas to call in the event of a power cut. The company is respond- ing to calls by politicians for a national blackout helpline, made following last Christmas's storms. It is understood to be the first distribution network opera- tor to establish a single number for all its customers to call in an emergency. The industry is currently in talks to establish a national three-digit emergency number, with autumn 2015 the earliest possible launch date. Fitzpatrick: 'We think it's poor regulation' I am the customer Ben Earl "Our goal is to unleash more water efficiency" Those of us in the southeast have had a hot, dry summer so far, which means once again atten- tion is turning to the efficient use of water in the home and garden. Our changing climate sees fluctuations of excess water fol- lowed by deficit. Despite having no short-term supply risks, we need to combine longer term sus- tainability with an affordability strategy to help the vulnerable. Finding a narrative to engage the customer becomes more challenging. Long-term policy on our customers' list of con- cerns and we wish to see how a well-developed set of options for water demand reduction could influence anticipated capital investments for water supply. Our ultimate goal is to therefore unleash more water efficiency at a scale that could both harness innovation while addressing customers' financial concerns. Ben Earl, water efficiency manager at Southern Water and chair of the UK steering group of The Water Label changes can play an important part and this is why Southern Water has recently launched a project with the Green Alliance think-tank. Together, we are looking at the extent to which water bills can be cut further by significant interventions in the market to reduce water demand, how the actions of policymakers, regulators and water companies could facilitate those reductions and, in the process, stimulate a debate on the most effective approaches to water efficiency. Having conversations with many different organisations and customers gives us the broad- est representation of views. The "cost of living" is already high