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Customers This week Ofwat to hold retail margin at 2.5 per cent Water regulator will not reassess cost allocation between retail and wholesale price controls Ofwat will hold the margin for the non-household retail market at 2.5 per cent, despite claims from industry that this will stifle competition when the market opens in 2017. Speaking at a Westminster Energy, Environment and Trans- port Forum event last week, Ofwat senior director for Water 2020 David Black said the regulator will not reassess the cost allocation between the retail and wholesale price controls set during PR14. He said: "We have thought about this quite hard during PR14. To be very clear, we are not reopening wholesale controls, we are not reopen- ing the retail household control, we are only reopening the retail non-household control." His comments have caused concern among potential market entrants, which say the margin must be higher to make entry and operation in the market viable. Business Stream is leading calls for the cost alloca- tion to be looked at when the non-household price con- trol is reopened in 2016, saying the current determina- tion is weighted too heavily towards wholesale activities. Business Stream chief executive Johanna Dow said: "What is increasingly apparent when you're looking at the cost allocation of the retail business, it doesn't cover all the costs associated with running a retail business." Nick Fincham, Thames Water's director of strategy and regulation, said: "It is very difficult to see how enough headroom can be created in the current level of price control to provide the necessary returns to encour- age efficient entry into the market." MB ENERGY Suppliers must avoid 'meter mountains' Energy suppliers have been warned to put processes in place now to return old meters during the smart meter programme, or risk "meter mountains" building during the mass rollout. Tom Woolley, business devel- opment manager at metering logistics company Meter Provida, said that although the mass rollout has yet to get under way, a backlog is already building. Woolley said: "If we ignore this we will have meter moun- tains around the UK." Suppliers are expected to install 900,000 meters a month during the mass rollout, due to start next year. Suppliers have already installed 1,327,400 smart meters in domestic customer properties before the mass rollout, the gov- ernment revealed last week. ENERGY DCC will be ready on its go-live date The Data and Communications Company (DCC) is certain it will hit its April 2016 go-live date, but is likely to only release a "baseline" version with limited functionality, it has confirmed. Operations director Dave Broady said there is "no doubt" the first version will be ready for April, but the network may require "two or three additional releases" aer going live in April 2016 before suppliers and other users will be able to use it fully. Broady said the DCC entered a period of systems integration testing at the beginning of Sep- tember on schedule, and the first message was sent and received successfully through the system architecture earlier this month. "This is a point for celebra- tion for us, a lot of hard work to get us to that," he said ENERGY Disconnections for debt fell in 2014 The number of energy customers disconnected for being in debt was 65 per cent lower in 2014 than in 2013. The latest Ofgem figures on domestic suppliers' obligations reveal that there were 192 elec- tricity disconnections for debt in 2014, down from 556 in 2013. There were 41 gas disconnec- tions for debt in 2014, down 51 per cent from 84 disconnections in 2013. The number of energy cus- tomers in debt dropped slightly, down to 5 per cent from 6 per cent in 2013, although the aver- age amount of debt increased by 16 per cent for electricity and 18 per cent for gas, compared with the amount owed in 2013. The average debt in 2014 was £355 for electricity and £382 for gas. Is there enough headroom to turn a profit? I am the customer Jo Causon "Customers expect a seamless experience" In an environment in which customers are increasingly encouraged to manage their accounts and tariffs online, the way companies in the utilities sector offer support is under the microscope. Asked about the ease with which they can find information online, customers scored the sector 7.5 out of 10 in the latest UK Customer Satisfaction Index – below the average for the UK as a whole. And when it came to handling complaints online, the departments they come into contact with. Organisations that use social media to converse with cus- tomers will have a competitive advantage over those that are slow to respond. Jo Causon, chief executive, Institute of Customer Service customers were quick to suggest that the sector is performing worse than others in the UK. Social media provide a public platform – and the sort of easy access to organisations that the modern consumer craves – so they are fast becoming an essential component of customer service strategy. The key is being able to deliver a truly integrated communication platform, where customers have the choice of how and when they communi- cate with an organisation. Social media are increasingly becoming the responsibility of the whole company, with customers expecting a seam- less experience with each of 22 | 18TH - 24TH SEPTEMBER 2015 | UTILITY WEEK Jo Causon is speaking at the Utility Week Congress 2015 on 14 and 15 October. Visit www.uw-congress.net