Utility Week

UTILITY Week 11th September 2015

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

Issue link: https://fhpublishing.uberflip.com/i/568088

Contents of this Issue


Page 24 of 31

Customers This week Ofgem blamed for metering delay Regulator's 'reluctance' to use its powers delayed implementation of half-hourly metering Better project management by Ofgem would have enabled faster introduction of half-hourly metering for business customers, according to the Balancing and Settlement Code (BSC) Panel. In a submission to the Com- petition and Markets Authority (CMA) investigation into the energy market, the panel cited a "reluctance" by Ofgem to use its powers as contributing to the challenges faced in introducing half-hourly meter- ing for business customers. The panel made the comment in a response to the CMA's proposal to change the management and govern- ance of market codes, one solution being to give Ofgem more powers to govern. The panel said it "supported more active participation by Ofgem earlier in the devel- opment and assessment of change", but the regulator preferred to "encourage the industry to find the best solutions and appropriate timetables". Half-hourly metering for business customers in meter profile classes 5-8 was delayed by a year until April 2017 by Ofgem aer the BSC Panel voiced concerns over inter- rupted supplies due to the short implementation period allowed under the original deadline. Although the panel recommended in February 2014 that a delay was necessary, it was not approved until July 2015, because Ofgem was unwilling to grant it with- out modification to the implementation strategy. The panel also does not support further regulatory oversight under the terms of a licence, as proposed as an alternative to granting further powers to Ofgem. LD WATER Water suppliers face minimum standards Water retailers and wholesalers will have to meet a set of mini- mum guaranteed service stand- ards to non-household custom- ers from April 2017, according to proposals from Ofwat. Ofwat plans to extend mini- mum service standards, with wholesalers being held respon- sible for dealing with issues surrounding low water pressure, providing notices for interrup- tion of supply, failing to restore supplies, and sewer flooding. Under the provisional alloca- tion, water retailers will be held accountable for making and keeping appointments, handling complaints and dealing with account queries and requests to change payment arrangements. If the wholesaler or retailer fails to meet any of their allo- cated service standards, they will obliged to make a specified pay- ment to the affected customer. The deadline for responses to the consultation is 2 October. ENERGY Fast-tracking prepay could delay rollout Battle lines have been drawn in the energy industry over whether smart prepayment meters should be rolled out ahead of other smart meters, as recommended by the Competition and Markets Authority (CMA). Responding last week to the CMA's proposed energy market remedies, the Data Communica- tions Company (DCC), which is managing the smart communi- cations network, warned that prioritising prepay meters would delay the rollout and force it to revisit its strategy. Some suppliers joined DCC in criticising the proposed remedy, with First Utility, Flow Energy and Good Energy agreeing it would cost more to replace recently installed non-smart prepay meters and remove the potential savings of a geographical rollout. However, Ecotricity, Ovo Energy and Co-operative Energy welcomed the idea, saying that prepay customers should receive the benefits of smart metering, such as a wider range of tariffs, as soon as possible. Analysis, p14 ENERGY GDF Suez Energy UK tops customer index The Institute of Customer Service has ranked GDF Suez Energy UK as the highest-scoring energy company against its latest UK customer satisfaction index. GDF's customers gave the business supplier top scores for the friendliness and helpful- ness of its staff, the quality and efficiency of its service and the ease of getting in touch. Ofgem: criticised for poor project management I am the customer The Behavioural Insights Team "Careful attention must be paid to the consumer experience" The simpler choices component of the Retail Market Review rules was intended to make it easier to switch energy supplier. However, it does not appear to have led to higher consumer engagement. It is worth noting that while limiting suppliers to four tariffs does not seem to have increased switching, on its own, this does not mean that having too many tariffs would not be an obstacle if individu- als are not helped to navigate those tariffs. The lack of growth of friction costs means careful attention must be paid to the consumer experience. Simplifica- tion can be achieved by giving consumers tools to help them choose, such as price compari- son sites. Rather than expecting people to visit multiple sites, a focus should be on making the sites operate well so that people can be confident using them. The Behavioural Insights Team, drawn from its submission to the CMA's energy inquiry in switching might indicate that there are other, bigger, barriers. While the Behavioural Insights Team supports the suggestion to remove the restric- tion on the number of tariffs, competition will grow only if the demand side of the market is operating effectively. To this end, we urge the Competition and Markets Authority (and other reg- ulators) to continue to simplify the market so that demand can respond quickly and accurately to market conditions. Behavioural insights suggest that transaction or 'friction costs' have a larger impact than has been assumed in standard economic models. The existence UTILITY WEEK | 11TH - 17TH SEPTEMBER 2015 | 25

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 11th September 2015