Utility Week

UTILITY Week 13th November 2015

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

Issue link: https://fhpublishing.uberflip.com/i/599772

Contents of this Issue


Page 23 of 29

Customers This week Ofwat: price controls to 'promote trust' Regulator wants to ensure move to water mar- ket competition does not disadvantage customers Regulatory protections will be needed to protect custom- ers from potential abuse from "substantial market power" in the transition to water market competition, Ofwat has said. As part of a review of non- household retail price controls, the regulator said it wants to make sure new market arrange- ments do not disadvantage certain customers. It said while price controls must not "create undue barriers to entry or expansion", basic protections must be put in place to "promote trust and confidence" in the delivery of water and wastewater services. Ofwat said default tariffs – a form of back-stop pro- tection for customers in the non-household water and wastewater retail market – "remain appropriate". However, problems have been highlighted in the energy market, which became competitive 15 years ago, such as the average cost to serve for non-household cus- tomers being higher than the allowances made in setting the default tariff caps. In the water sector, non-household retail costs increased in 2014/15, the regulator said, and the non- household retail price controls set in December 2014 "did not include a sufficient allocation of costs or margins". The regulator wants companies to engage with cus- tomers to develop their default tariff caps proposals. It is also consulting on how to improve transparency in the mapping of tariffs to the default tariff caps. The consultation will close on 11 December. LV ELECTRICITY Eon fined £7m for late meter delivery Eon is to pay out £7 million aer failing to deliver advanced meters to its business electric- ity customers by the April 2014 deadline, Ofgem said on Monday. The supplier managed to meet only 65 per cent of its obli- gation and says it will now pay £7 million to the Carbon Trust. It could face a further £7 million penalty and a sales ban unless it meets its new interim target. Ofgem said the government's advanced meter rollout scheme for businesses began in 2009, meaning Eon had five years to fit advanced meters for around 20,000 customers, but more than 7,000 customers did not receive a meter on time. WATER Thames identifies 'fatberg hotspots' Thames Water has revealed that 21,384 blockages caused by "fat- bergs" have been cleared from its three worst-affected areas in the past five years. The company said 12,386 blockages have been cleared in Havering and 8,998 in Barking and Dagenham – treble the number in the whole of Oxfordshire. Thames has launched a campaign urging customers not to flush anything other than toilet paper and human waste. It will offer free "fat traps" to encourage customers to throw used cooking fat in the bin, and billboard and bus stop posters will appear across the boroughs. Formed when leover cooking fat and wet wipes congeal into a solid mass in sewers, fatbergs block pipes and can cause sew- age to back up into homes and gardens. They cost Thames about £1 million a month to clear. ENERGY First Utility fulfilled WHD, rules Ofgem Ofgem has ruled that independ- ent supplier First Utility has now met its obligations for the Warm Homes Discount (WHD) scheme, despite missing several dead- lines. First Utility was initially found to be "non-compliant", but has now met the overall spend obligation, despite failing to provide support to vulnerable customers by the specified dead- lines on 984 occasions. A spokesperson for Ofgem E-Serve, administrator of the scheme, said: "Overall we judged First Utility to be non-compliant. This was accepted by First Utility, who we worked with to ensure issues were rectified going into the fih year of the scheme. "Following detailed assess- ment of First Utility's support to consumers, we judged that First Utility had met their overall obligation to bill payers." Ofwat is reviewing non-household price controls I am the customer Richard Lloyd "We want the CMA to tackle numbers on standard tariffs" As the Competition and Market Authority's (CMA's) energy mar- ket investigation reaches its final stages, Which?'s Fair Energy Prices campaign is calling for action to tackle the millions of households on standard tariffs. The government's latest data shows switching levels over the past two years have failed to reduce the numbers on stand- ard tariffs. Since early 2014, the levels of people on standard electricity tariffs have remained at an average of 75 per cent. This regulator must reverse this trend if its inquiry is to result in a com- petitive market with fair prices. When the CMA reports next year, we want it to: tackle the number of people on poor value standard tariffs; make it easier to compare and switch; and penal- ise suppliers who fail to protect the most vulnerable customers. More than 330,000 people have already pledged their sup- port for Which?'s campaign. Richard Lloyd, executive director, Which? means 21 million customers are on these tariffs, which cost on average about £54 (or 9 per cent) more than other deals. It is a similar story with standard gas tariffs, which stalled at 73 per cent, or 16 million customers, at the start of 2014. A standard gas tariff costs around £75 (or 10 per cent) more than other deals. According to the government, in 2014, 11 per cent of people switched electricity supplier and 10 per cent switched gas sup- plier, but this hasn't significantly reduced the numbers on stand- ard tariffs. Retail Market Review reforms have not sufficiently increased consumer engagement with this essential market. The 26 | 13TH - 19TH NOVEMBER 2015 | UTILITY WEEK

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 13th November 2015