Utility Week

UTILITY Week 3rd July 2015

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

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UTILITY WEEK | 3RD - 9TH JULY 2015 | 21 Operations & Assets Manitoba and Tollgrade are work- ing on developing a system of smart grid voltage sensors as a cost-effective method for obtaining real-time, accu- rate voltage measurements. Using the sensors would eliminate the need for the installation and calibration effort associated with traditional medium voltage metering devices. If you have an asset or project you would like to see featured in this slot, email: paul.newton@fav-house.com Pipe up Tony Stiff O fgem's Retail Market Review (RMR) was meant to deliver better outcomes for customers. The perception was that over the years, energy compa- nies had created tariffs, pricing, offers, deals, bills and statements that, generally, were too opaque for energy customers to be able to make informed decisions about which energy supplier would be the best for them. RMR was designed to sweep away complexity and replace it with the simplicity of a tightly controlled regime in which all suppliers operated on a level playing field with clear constraints on what they could do to win and retain customers. This would deliver a fairer deal for all. However, the problem with RMR was that, although it was designed primarily with the behaviour of the big six in mind, it was applied to all suppliers. So small sup- pliers who had been working hard to bring change to the market found themselves saddled with new rules and regulations that proscribed many of the methods they were using to innovate. RMR was brought about to discour- age bad behaviour. But it also stifled creativity. Fortunately, this didn't last long. Almost immediately, smaller suppliers started to ask for derogations from the RMR rules, in order to continue to deliver innovative services to their custom- ers. Ofgem should be applauded for the fact that it has granted many of them. While rules are clearly important in any regulated system, good outcomes for customers are vital and therefore bending or waiving the rules in specific cases, if it means a better outcome for custom- ers, is an intelligent way of applying a regulatory regime. This comes back to the idea of trust, continually a hot topic in the energy industry. Oen, the debate focuses on the ability or otherwise of customers to trust energy firms. But when it comes to regulation, it's really about the regulator being able to trust suppliers. Many of the small- to-medium suppliers (and I count Flow among them) have proved to be driven by a desire to provide keen pricing, excellent service and innovative offers. They've also illustrated a commitment to openness, honesty and fairness. In that respect, smaller suppliers, who know that they'll only grow if they commit to these values, can be trusted to be self-regulating. Prescriptive rules are an encumbrance to their ability to innovate as they strive for more creative ways to deliver incredible service. It is becoming apparent that Ofgem may well agree with this argument. The sooner we move to an outcomes-based system, where behaviour is deemed appropriate if it delivers a good outcome for customers, the better. Tony Stiff, chief executive, Flow Energy "Bending or waiving the rules, if it means a better outcome for customers, is an intelligent way of applying regulation." "When it comes to regulation, it's really about the regulator being able to trust suppliers"

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