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12 | 3rd - 9th OctOber 2014 | UtILItY WeeK Policy & Regulation Ofgem has launched an investi- gation into Economy Energy to review whether the company has complied with its licence condi- tions when communicating with customers. The investigation will review whether Economy Energy has taken reasonable steps to com- municate the main terms of its contract to customers; given them the mandatory 30 days' energY Ofgem begins investigation into Economy Energy notice of a price rise; and com- municated complete and accu- rate information in its marketing and telesales activities. It follows a provisional order in February, issued aer watch- dog Consumer Futures alerted Ofgem to a high level of customer complaints about the company. The order required Economy Energy to stop selling contracts to new customers, start operating more call centres to handle cus- tomers' queries, and give its cus- tomers adequate notice of a price rise. The order against acquiring new customers still stands. Economy Energy supplies gas and electricity to around 50,000 customers across the UK. Utility Week contacted the company for comment, but it had not responded at the time of going to press. This week Severn Trent focuses on 'critical issues' Severn trent reveals four 'critical issues' ahead of draft determination representation deadline Severn Trent Water has outlined four "critical issues" that it will focus on ahead of the dra determination's representation deadline of 3 October. In a letter to Ofwat, chief executive Liv Garfield said Sev- ern Trent would work to justify the company's approach to the levels of bad debt, and issues surrounding the outcome delivery incentives. Severn Trent will also focus on two issues around the Elan Valley Aqueduct: the inclusion of the revised cost of the scheme; and the cost-benefit assessments of com- munity risk schemes, which will be reduced compared with the revised business plan. Garfield said prioritising "a relatively small number of material issues" in Severn Trent's dra determination responses would "help ensure an effective process". She added that challenging a wide range of issues ahead of the October deadline "would potentially under- mine the constructive dialogue" with Ofwat and that Severn Trent had accepted the position set out in the dra determination for other issues. Replying to Garfield, Ofwat's portfolio director Giles Stevens said this move would "help to make the most effective use of resources for both teams to deliver the best outcome for customers". He stated that the regulator would "limit our attention to the select issues identified" in Severn Trent's letter, but said there were "no guarantees" about the outcome of Ofwat's assessment and that it would consider all representations made in relation to the dra determinations. The final determinations will be made by Ofwat in December, and will come into force next April. MB gaS Yeo: communities 'need to be bribed' Local communities need to be "bribed" to accept the develop- ment of fracking wells, according to the chair of the Energy and Climate Change select committee. Speaking at a fringe event of the Conservative party confer- ence in Birmingham, Tim Yeo said awarding community ben- efits was the "right way" to get local communities to accept the development of fracking wells. He said: "It's a perfectly safe technology and communities are very fearful and we need, frankly, to bribe them into get- ting one or two going and then that fear would be removed." His comments came aer Ineos offered communities living above a shale gas well benefits of up to 6 per cent of revenues. Currently, government regulations state that developers must award local communities £100,000 in benefits for each well drilled, and a total of 1 per cent of the revenue generated from the gas produced at each well. Yeo added that benefits awarded to communities hosting fracking wells, as well as other energy infrastructure projects, would continue to be best dealt with via local planning decisions. Simon Moore, senior research fellow for the environment and energy at Policy Exchange, agreed that communities need to have a larger input into the development of energy projects, as well as benefits from hosting them. He said: "Incentives to encourage local communities to accept these things is favourable [rather than] imposing these things from the top. "The nature of any compen- sation should respond to the individual circumstances of each project, and the details and nego- tiations should be kept between developer and community." gaS Private property law changed for fracking Shale gas and geothermal energy companies are now allowed to drill under private property, following an amendment to the UK's trespass legislation. Prior to the change, compa- nies would require permission from landowners if hoping to drill under their property to access shale gas or geothermal energy reserves. This could result in shale projects being "significantly delayed by a single landowner", the Department of Energy and Climate Change (Decc) explained, adding that the new laws "remove the barri- ers" to developing the sector. The new legislation, which was proposed in May, will allow oil, gas and geothermal compa- nies to use underground land to exploit the energy resources, but only at a depth exceeding 300m. Decc has pressed ahead with introducing this new legislation as part of the Infrastructure Bill despite the fact that 99 per cent of respondents to its consulta- tion opposed the plans. "Having carefully considered the consultation responses, we believe that the proposed policy remains the right approach to underground access and that no issues have been identified that would mean that our overall policy approach is not the best available solution," Decc said. Ken Cronin, chief executive of UK Onshore Oil and Gas, said: "The amendments to the bill will give automatic access rights to underground land below 300m, bringing it in line with other essential services such as water, sewage and coal." Garfield: prioritising for 'an effective process'