Utility Week

Utility Week 1st May

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8 | 1ST - 7TH MAY 2015 | UTILITY WEEK Policy & Regulation Ofgem has levelled a financial penalty of just £1 against Spark Energy aer the supplier was found to have been in breach of its customer supply code. The new market entrant agreed in February to pay £250,000 in redress aer Ofgem found that Spark had stopped some customers from switching, wrongly transferred others to new suppliers without their con- ENERGY Ofgem fines Spark Energy £1 for code breaches sent, and fallen short of billing and complaints standards. Last week, in addition to the redress payment, made to Citi- zens Advice and Citizens Advice Scotland, Ofgem said it would level a financial penalty of £1. Most of the failings took place between June 2010 and October 2013, a few years aer the company began operations in 2007. Ofgem's senior partner in charge of enforcement, Sarah Harrison, said in February that Spark's inexperience in the mar- ket "was no excuse" for breaking the rules. However, since then Ofgem said the supplier had "made sig- nificant progress" in putting new processes in place to resolve the issues and ensure the breaches did not reoccur. This week Suppliers doubt CMA will restore trust With politicians ready to scapegoat the sector, companies think CMA report will fall on dear ears Energy industry represent- atives have raised doubts that a clean bill of health for the market from the Competition and Markets Authority (CMA) would do anything to restore trust in the sector. At a roundtable debate at Utility Week Live, rep- resentatives from the big six, utilities consultancies and customer interest groups addressed the challenge of rebuilding trust in utilities, but said the findings of the CMA probe – even if positive – may do little to help. The consensus was that the findings would be overshadowed by continued negative messages from political parties, whose increasing interventions in the market were seen as the root cause of confused customer focus among suppliers. Elsewhere in discussion, one participant observed that the possible "contagion of reputational risk" was an inevitable feature of a complex industry, with third parties representing a challenge to the ability of utilities to rebuild trust. The CMA is expected to make its initial findings pub- lic in June, with its final report expected by Christmas this year. The Conservatives have committed to implementing the findings of the report, while the Liberal Democrats have said they would not treat it a binding, but would treat it "very, very seriously". The Labour Party has said it would carry on with its planned reforms of the energy sector, designed to build trust and make it "fair" for consumers, regardless of the CMA's findings. JG ENERGY ENA: we need stable network regulation The next government must maintain a stable regulatory environment for the energy net- works to ensure they are secure and affordable, the Energy Networks Association (ENA) has said. The group has published a list of ten recommendations for the government, telling it how to cope with a changing energy system being revolutionised by new technology. Other advice includes: an effective connections policy; investment in skills and innova- tion; increased interconnector capacity; and the right condi- tions for long-term infrastructure planning. The vital role of gas networks and green gas is also empha- sised, alongside the need to continue supporting fuel-poor communities through connec- tions to the gas grid. WATER Ofwat calls for more collaboration More collaboration in the water industry is essential for tackling long-term challenges such as population growth, climate change and rising customer expectations, Ofwat econom- ics director David Black has insisted. Speaking at Utility Week Live in Birmingham last week, he told delegates that the regulator has established a "water 2020" programme to consider the design of PR19. He said: "We need to be working more collaboratively with the sector. We see our role as both allowing the sector to create value and allocating that value between the different stakeholders. Creating value is all about more from less. In eco- nomic terms, how we raise the productivity of the sector." The next steps for Ofwat will be to "produce a consultation in July this year to consider the drivers for change and the issues facing the water sector", he said. "In December we will set out our initial views about how we see our approach to these issues, which we hope will give some clarity to stakeholders about our approach." WATER Wessex: negotiated settlements are key Negotiated settlements between water companies and their customers need to provide the basis of PR19 business plans, according to the boss of Wessex Water. Speaking at Utility Week Live, Wessex Water chief executive Colin Skellett said this model, used in Scotland, would "minimise the role of the regulator and maximise the role of customers". He said Ofwat should go fur- ther with outcomes-based regu- lation, introduced for PR14, and take a step back to allow water companies to "own the relation- ship with their customers". Skellett told delegates: "In Scotland in the last price review there was direct negotiation between Scottish Water and independent customer repre- sentatives… that is where we have got to move towards." Ofwat senior director for customers and casework Richard Khaldi, who was also speaking at the conference, agreed that "as a regulator we need to take a step back and allow companies to own the relationship with customers". Cost of living crisis: energy firms in the frame

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