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UTILITY WEEK | 13Th - 19Th March 2015 | 25 Customers This week Government 'failing' on smart meter issues Energy and climate change committee urges issues to be addressed to avoid a "costly failure" The Department of Energy and Climate Change (Decc) has been scolded by MPs for "failing to resolve" problems that could cause the smart meter rollout to "veer off track". In a report published on Monday, the Energy and Climate Change committee urged the gov- ernment to address technical, logistical and public com- munication issues, which have delayed the national smart meter rollout programme, to ensure the scheme is not a "costly failure". Committee chair Tim Yeo said: "Smart meters could generate more than £17 billion in energy savings for the country, yet a series of technical and other issues have resulted in delays to the planned rollout. "The energy industry told us that it needs the govern- ment to enable industry-wide solutions, rather than the less efficient alternative of letting each energy supplier develop its own solution." The committee attacked Decc for failing to resolve tech- nical communication problems with multiple occupancy and tall buildings, or compatibility problems between suppliers and meters. It also said full engagement with the public has "had a slow start" and that there has been a "reluctance [by government] to improve transparency" by publishing the Major Projects Authority's assessments. Following energy secretary Ed Davey's announce- ment that the date from which the Data Communication Company plans to deliver operational services had been pushed back a further four months to April 2016, MPs warned "time is running out" on the plan to install smart meters in all the UK's homes and businesses by 2020. LV EnErgY Scrap standard tariff says First Utility Independent energy supplier First Utility has called for stand- ard variable tariffs to be scrapped as part of a drive to encourage more consumer engagement with the retail energy sector. The discrepancy between the price paid by "sticky" customers who remain on standard deals and the minority who switch to a better deal is believed to be £235-250 per year, raising concerns within the Competition and Markets Authority that the market is not competitive. The supplier's chief executive Ian McCaig said even though higher levels of tariff switching are being seen, the market is still "not working". "Speaking in broad terms we know that around 30 per cent of consumers are reasonably active in the mar- ket, a further 30 per cent switch tariff once in a while, and 40 per cent have never switched at all. But still 70 per cent of consum- ers are on the wrong tariff." He said suppliers should scrap standard tariffs in favour of a rolling "out of contract" deal reviewed against the wholesale market every three months. EnErgY Half of businesses have never switched Almost half of businesses that took part in a recent survey said they had never switched energy supply tariff, despite three- quarters believing they spend too much on their utility bills. While the lack of household engagement has attracted strong political attention, the busi- ness supply market should also benefit from stronger competi- tion, said Andrew Richardson, deputy chief executive of energy advisory Utilitywise. The report found that 46 per cent of businesses feared the costs and paperwork attached to switching energy deal. WaTEr CCWater gives complaints warning The Consumer Council for Water (CCWater) has urged water companies to ensure their complaints handling procedures are "fit for purpose" ahead of the incoming alternative dispute resolution system. CCWater regional chair for London and the south east, Sir Tony Redmond, told Utility Week firms need to review their systems to ensure they "easily slot into this new arrangement", which goes live at the start of April. He said the companies' complaints procedures "need to dovetail with the new redress scheme" to make the process as smooth as possible, and that they will have to inform their customers about the new system. Full public engagement has had a 'slow start' I am the customer Richard Lloyd "The CMA must establish a fair benchmark price" Despite the recent price cut announcements, energy prices remain one of the biggest wor- ries for consumers. So it's not surprising that making the mar- ket work better for consumers is still a political hot potato. Our latest research analys- ing movements in energy prices revealed some worrying results, showing bills could have been cut further and sooner than the recent round. We used real market data and a range of hedging strategies to we've known all along: that competition is just not working for consumers. The CMA now needs to develop a set of solutions to repair the market and make it work for everyone. Which? is calling for the CMA to establish a fair benchmark price that people can trust. It's high time that consumer confidence was restored in the energy industry. Richard Lloyd, executive director, Which? analyse the costs to suppliers of buying wholesale energy since 2009 and compared this against what consumers have paid for wholesale costs through their bills in the same period. The analysis suggests standard vari- able energy tariffs have not kept in line with wholesale prices over the past two years. We found that the failure of retail prices to align with whole- sale costs meant an annual equivalent of £145 extra per household on standard energy tariffs. On 18 February, the first of many reports from the CMA's energy market investigation was published confirming what