Utility Week

UTILITY Week 19th February 2016

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24 | 19th - 25th February 2016 | utILIty WeeK Customers This week CCWater warns of social tariff 'overlap' Improvement needed in take-up and solving issues where almost all funding has been used The Consumer Council for Water (CCWater) has warned of a "significant overlap" between social tariff schemes of water and sewerage companies in certain areas, particularly in the southeast of England. The group said it would continue to work with compa- nies in these areas to ensure any overlap does not cause customer detriment. CCWater has also warned that some companies are close to exhausting the funding they have for social tariffs. "Whilst social tariffs are providing some help to low-income customers, the extent to which they can pro- vide support is inevitably constrained by the willingness of other customers to contribute to their cost," it said. "This is particularly noticeable when customers find themselves eligible for a scheme operated by their water provider but not for one operated by their sewerage services company, or vice versa," it added. The group said an "unintended consequence" of social tariff schemes being based on customers' support is that both the criteria for the scheme and the level of financial support available can "differ significantly" between com- panies. It said it would continue to work with companies on the implementation and improvement of social tariffs, helping to improve take-up levels and overcome issues where customer funding is close to being exhausted. So far, all ten of the water and sewerage companies and four of the eight water-only companies have social tariffs, with the remaining four intending to have them in place this year. LV Gas Ofgem 'lacking urgency' over PPMs Citizens Advice is "disap- pointed" with Ofgem's "lack of urgency" in solving the issue of prepayment meter (PPM) gas tariffs, according to its response to the Competition and Markets Authority (CMA) investigation. To launch a prepayment gas tariff, a supplier must first purchase a 'slot' from Siemens, which manages the gas prepay- ment system. The number of slots available is limited, and dominated by the big six energy suppliers. In a written response to the potential remedies set out by the CMA for PPM customers, Citizens Advice claims several suppliers have complained to Ofgem about their inability to obtain new slots and launch new gas tariffs for traditional PPMs. The response says the issue has delayed or constrained some suppliers' plans to compete in the prepay market, which is "unacceptable in a market which predominantly serves more vulnerable households". eLectrIcIty Call for communities to get grid priority The Fuel Poor Network Extension Scheme should incentivise gas distribution networks to connect communities to the grid over indi- vidual properties, National Grid Affordable Warmth Solutions (National Grid AWS) has said. It has also called for a "collab- orative, coordinated approach" to tackling fuel poverty by connecting homes to the grid by allowing greater alignment between the incentive scheme for networks and the funding pro- vided by government for home energy efficiency improvements. The community interest company, set up by National Grid in 2008, said Ofgem should dis- tinguish between types of con- nection in the scheme as some are more costly. National Grid AWS managing director Jeremy Nesbitt said: "I would strongly argue that the greatest impact is on community homes and maybe the scheme should recognise the fact that community schemes are more expensive to deliver." enerGy SSE bills have been 'radically simplified' SSE has redesigned its bills in a bid to increase transparency and help customers understand what they are paying for. SSE claims it has "radically simplified" bills as a result of a year of customer-led research, speaking to more than 8,000 energy consumers across suppli- ers, and consumer groups such as Citizens Advice and uSwitch. The redesign comes following ongoing calls from Ofgem to reform energy billing. Close to exhaustion: funding for social tariffs I am the customer Adam Wilson "Switching could increase as people look for better deals" Like other utilities, the energy market is characterised by inertia. With three-quarters of consumers unlikely to switch supplier, our segmentation of the consumer market shows that companies can help encourage switching. One in ten energy customers are 'Serial Switchers', having switched energy providers in the past year and likely to do so again this year. Despite being largely satisfied with their cur- rent provider they are still likely they are also attracted by brand values and ethics – especially the use of renewables. It's possible that with reduced prices recently announced by some of the big six, the scale of switching could increase as people look for better deals. Providers need to remember the importance of their public image in order to maintain new cus- tomers – an area that independ- ents seem to succeed in. Adam Wilson, research manager, Opinium to switch because they are aer one thing – a cheap deal. One in ten customers are 'Nudge Needers'. While they haven't switched in the past year, 82 per cent have thought about switching and are likely to switch in the next year. They are looking for better service as they are the most dissatisfied with their current provider, a factor that should be exploited by providers. However, it is possible to cre- ate 'Committed Converts'. One in 20 consumers have switched in the past year, but are unlikely to switch again soon as they are very satisfied with their new pro- vider. While these consumers are driven mainly by saving money,

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