Utility Week

UTILITY Week 20th March 2015

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

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UTILITY WEEK | 20TH - 26TH MARCH 2015 | 27 Customers This week Npower 'unlikely' to meet service pledge Npower unlikely to meet CEO's target of topping the sector's customer service surveys by year end Npower is unlikely to meet its chief executive's aspiration of topping the energy sector's cus- tomer service surveys by the end of this year, a company spokes- man has admitted. Paul Massara stepped into the role at the beginning of 2013, promising that the firm would climb from the bottom of the cus- tomer service league tables to the top in just two years. But its business relations manager Dan Meredith told Utility Week he would be "very surprised" if this was achieved. "It was always an aspirational target," Meredith said. Npower has been dogged by customer service woes following the introduction of a new billing system that resulted in inaccurate and heavily delayed customer bills in 2013. Massara was forced to make a public apol- ogy to Npower's 3.4 million customers, and the company was ordered to pay a fine of £3.5 million to Ofgem. The company was still rated the worst for customer service at the beginning of 2015 by Which?, and Massara faced German press reports that parent company RWE was prepared to replace him due to poor performance. Meredith was quick to "categorically deny" the reports, saying the supply business as a whole has seen strong progress over the past year, particularly in the business market, and the household market is "an anomaly". Although Npower is unlikely to replicate its business supply success in the residential market this year, Mere- dith said this "shouldn't be taken as a failure". "[W]e won't stop working towards it until we are there," he said. JA See analysis, p24 WATER MEUC: market must be 'fit and ready' The water market must be "fit and ready" to allow multi-site customers to switch to a single supply from day one or face con- sumer disengagement, the Major Energy Users' Council (MEUC) has warned. A total of 71 per cent of the MEUC's members surveyed for its water competition manifesto said it is important that the market opens on time, and that it functions properly as soon as it opens. Almost half said any failures in the market that allow things to "go wrong" would deter them from switching sup- plier or looking for a better deal. A quarter said they had concerns that any complications could lead to supply or admin- istration problems, and 17 per cent doubted whether any good deals would emerge. The MEUC said: "We need assurance that switching will be smooth and the market will work." There was also a strong call from 88 per cent of those sur- veyed saying business customers should be "actively involved" in the designing of the market. ENERGY Switching increases by 50% in February February saw a 50 per cent rise in the number of households switching energy provider, com- pared with January. The latest government data has revealed the number of switches in February shot up to 317,000, well above the monthly average for 2014. The dramatic increase follows a 30 per cent fall in switching in January, and correlates with price cuts from all the major energy suppliers in the second half of the month. Energy secretary Ed Davey claimed the spike is down to the government's reforms that "give people the power to switch". The data also shows 25 per cent of all switches in February were to independent suppliers. ENERGY Barker says on-site renewables are key Former climate change minister Greg Barker has urged the UK government to give greater prec- edence to on-site renewables. Speaking at a renewable energy debate in London, Barker emphasised that he would "prefer technologies such as offshore wind and on-site renewables" over "distant renewables in places where there are no customers". He added that there is "suf- ficient scope" in the planning pipeline to meet the govern- ment's "very ambitious" 2020 targets. However, in order to do so, commercial and industrial spaces must be "creative" in how they tackle renewables. Massara: RWE said to be prepared to replace him I am the customer Peter Pharoah "Things can get tricky in the so-called shoulder months" Temperatures are getting warmer as spring arrives and energy buyers, particularly those on flexible contracts, will be rub- bing their hands in glee expect- ing lower prices as demand falls. Unfortunately that's not always the case. The UK energy market is now mature and reasonably well structured, and suppliers are clearly fully aware that demand ebbs and flows with the seasons. Therefore, a large number of maintenance and infrastructure checks take seasonal changes in supply begin to take effect. Historically, the UK has seen some of its highest energy prices in these periods. The answer is probably to fix before the period in question, or at least have the option to hedge forward at a time of your choos- ing. Whereas it might be a good market call to hold off, or pur- chase fully your energy exposure at certain times of the year, April is oen not the right time to do it. Peter Pharoah, head of energy markets, ENER-G Procurement place during the summer months when demand is at its lowest. This is oen not an issue – the UK could easily deal with a major gas pipeline being taken offline in July or August, for instance. But things can get tricky in the periods that traders call the "shoulder months". These are the times where it may be summer according to your desktop calen- dar, but the energy system can still be exposed to frost and even snowy conditions – usually April and to a lesser extent September. During these shoulder months it is rarely recommended that clients take their exposure into the spot market. Spot prices can leap to unusually high levels as

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