Utility Week

Utility Week 24th April 2015

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UTILITY WEEK | 24TH - 30TH APRIL 2015 | 25 Customers This week Supplier funds target vulnerable customers Help for those struggling with energy bills from big six suppliers Eon and Scottish Power Big six energy suppliers Eon and Scottish Power have launched multi-million pound funds to help those in fuel poverty. Scottish Power has introduced a £5.2 million hardship fund to help customers in financial difficulty and Eon has launched a £6 million fund to help people who are struggling to pay their energy bills, even if they are not Eon customers. Eon said its energy fund was open to all pensioners, families, people with disabilities and those on low incomes. Eon UK chief executive Tony Cocker said: "Successful applicants could receive help with settling debts on their energy bills and support in the form of a new energy- efficient boiler, washing machine, fridge, or freezer. We urge anyone who's eligible to get in touch so our independent partner, Charis Grants, can advise them on the support available." The fund has been set up aer Eon told Ofgem in September 2014 it would give back closed credits to vulnerable people who meet its eligibility criteria. Days earlier, Scottish Power announced a £5.2 million fund to help financially challenged customers, offering financial support to eligible consumers by clearing or reducing energy debts on their Scottish Power accounts. Scottish Power funding will initially be assigned over the next two years. The fund will award grants between £100 and £3,000 depending on the size of the debt owed, the individual circumstances of the case, and the money available in the fund at the time. LV ENERGY Switching more than doubles in March The number of energy customers who switched supplier in March rose by more than 50 per cent compared with the same period last year. A total 417,000 households changed supplier last month, over 100,000 more than in Feb- ruary. Nearly 98,000 switched to independent companies. Trade association Energy UK hailed the figures as "proof the industry is working", and said awareness had been boosted by falling prices, increased competi- tion and the government's Power to Switch campaign. Switching has increased dra- matically recently. Government data reveals that the number of switches in February shot up to 317,000, linked to price cuts from the major energy suppliers. The number of switches to small suppliers also continues to increase, exceeding 50 per cent for the first time in May last year. ENERGY Scots' 2020 green heat targets at risk Scotland could miss its renew- able heat target of 11 per cent by 2020 unless there is a "major change of mindset", according to Scottish Renewables. The trade body said the country would need to "kick its addiction" to gas-fired boilers if it is to meet the ambitious target from its current renewable heat use of just 3 per cent. The benefits of decarbonising heat are not only environmen- tal but could save consumers money and boost the local economy, said the group's policy manager, Stephanie Clark. "We have a chance of reach- ing what is a very ambitious 2020 target, but we have to act now. If we can do it, consumers and businesses will be insulated from the price fluctuations and uncertainty of supply associated with gas," she said. ELECTRICITY Local campaigners to fight metal theft Northern Powergrid has launched a campaign to engage with local communities in a bid to curb metal the. The campaign, a joint ven- ture with independent charity Crimestoppers, comes aer a number of incidents last year that caused power disruption for nearly 37,000 people in West Yorkshire and Stockton-on-Tees. The scheme will run across a 25-mile radius spanning both affected areas and use online channels such as Facebook, Twitter and LinkedIn to ask people for anonymous informa- tion about the criminals who are targeting their community. Pensioners are among those who should benefit I am the customer Peter Pharoah "It is difficult to get a reliable view of market prices" Many energy consumers assume that any supplier or broker can simply buy the commodity they require at any time. Oen that is not the case. The market requires "liquidity" for efficient purchases and sales. High liquidity is when there are many buyers and sellers inter- ested in undertaking a transac- tion. Low liquidity is when it's difficult to find a buyer or seller for an exposure a consumer may have. This can occur for long periods or specific months. The Competition and Markets Authority says results have been mixed; there are more prices offered during the "windows", but the re-entry of non-physical traders – to breathe life into the market – has not yet happened. Although attempts to improve liquidity are welcome, flexible power buyers should be mindful that prices quoted outside these windows are not necessarily a robust indication of the market. Peter Pharoah, head of energy markets, ENER-G Procurement The UK gas market has become a European leader for liquidity, but the electricity markets lag behind. Ofgem put in place a number of "secure and promote" measures last year to improve liquidity. This forced the largest energy companies to provide market-making whole- sale prices (a buy level and a sell level) at defined times each day (10.30 to 11.30am and 3.30 to 4.30pm on trading days). Liquidity has improved, but it is increasingly difficult to get a reliable view of market prices at other times because traders respond to the lack of liquid- ity by widening spreads, or not offering prices at all.

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