Utility Week

UTILITY Week 20th February 2015

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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UTILITY WEEK | 20Th - 26Th FEbrUarY 2015 | 3 Leader Ellen Bennett This week 4 | Seven days 6 | People & Opinion 9 | Special report Utility Week Keynote: Trust 18 Policy & Regulation 18 | News National campaign to promote switching 19 | Market view Time to set the scene for shale 21 Finance & Investment 21 | News Severn Trent results on track despite rising costs 22 Operations & Assets 22 | High viz FDN's floating houses 23 | Pipe up Dominic Thasarathar 24 Customers 24 | News Spark pays £250k for breaking Ofgem rules 25 | Analysis how the four-tariff rule is fading fast 26 | Market view Utilities must maximise the value of their data 27 Markets & Trading 27 | News brent crude price hits a two-month high 28 | Market view Vive la difference in European energy prices? 28 | Analysis Why Power NI can cut its prices while the big six struggle 30 Community 30 | Reader of the week Matthew Pringle, Energy Networks association 31 | Disconnector You can't buck the market… oh, really? A prominent figure in one of the 12 regional electricity companies privatised in 1990 recalled in a recent interview the omnipotence ascribed to "the market", back in the day. "When you look back to the world of the 80s and the early 90s, there was this naïve belief that was then economic orthodoxy, and if you thought otherwise you were an idiot or a caveman from the hills. The market has always got the answer." What would market purists make of this week's announcement that the government is running a nationwide advertising campaign encouraging consumers to do what they should do naturally – find the best deal? While stopping short of naming names, the campaign tacitly encourages consumers to switch to smaller suppliers. Mean- while, Ofgem is merrily granting (mostly) small suppliers a clutch of exemptions from another extremely anti-competitive measure, the four-tariff limit of the Retail Market Review. The government may well have it right: customers on standard tariffs with the big six suppliers are spending significantly more than they need to. They would be sensible to switch. But since when is it the government's job to spend taxpayers' money telling them so? In what other independent, competitive market does the government feel the need to intervene by telling customers to be sure they pay less for a given product? Certainly, in financial services, it insists on customers being properly informed of their options, and treated fairly, to borrow the regulatory jargon. In the same vein, it has laid the framework for faster, fairer switching of energy suppliers. But are consumers actively encouraged by government to switch bank account, insurer or mortgage provider? They are not. So why is energy singled out for special treatment? The coalition government is still smarting from Ed Miliband's politically inspired, if logically challenged, notion of a prize freeze (ahem, price cap). No doubt it wants to highlight the action it has taken to make switching easier, and show itself a champion of affordability. Sooner or later – and no doubt, later than 7 May – we're going to have to face facts. The current market structure and regulatory regime were designed for an independent, competitive market governed by economic forces rather than policy objectives. That, in today's political climate, is no longer acceptable. Something is going to have to give. Ellen Bennett, Editor ellen.bennett@fav-house.com GaS 18 | News Infrastructure bill 'not watered down' 19 | Market view Time to set the scene for shale 24 | News bG hits Eco target four months early WaTEr 23 | Pipe up Cloud computing in the water industry 24 | News UU expands water efficiency trial ELECTrICITY 18 | News Lib Dems would ban unabated coal 18 | News SNP calls for action on Longannet 21 | News EDF confirms Hinkley delay 27 | News UK has 10 per cent of EU's wind capacity ENErGY 21 | News Developers exploit subsidy loophole 21 | News £60m for local green energy projects 24 | News Switchers favour new market entrants 27 | News Global emissions trading system vital 28 | Market view Vive la difference in energy prices? 28 | Analysis Why Power NI can cut its prices Knowledge worth keeping Visit the Downloads section of Utility Week's website http://www.utilityweek.co.uk/ downloads Salesforce: how the cloud can help meet business objectives http://bit.ly/1EFZjlj Rolta: White Paper: IT and OT: In Tune and On Time http://bit.ly/1qPuBgR

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