Utility Week

UTILITY Week 21st October 2016

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Customers This week Only 8 per cent aware of market opening CCWater finds only about one in 13 businesses knows they will be able to switch water supplier Only 8 per cent of business customers are aware that the water market is set to open from April 2017. New research by the Consumer Council for Water (CCWater) found that 60 per cent of business customers support the idea of competition, but only about one in 13 is aware they will soon be able to switch supplier. Awareness is particularly low among smaller busi- nesses, and CCWater is concerned that they could be le behind unless the industry steps up its efforts to inform its customers. The group's chief executive Tony Smith said: "The whole industry needs to work together to make sure customers understand how the market will operate and could affect their business. "We'll certainly be doing all we can to ensure this is the case." About two-fihs (38 per cent) of business customers say they are likely to switch retailer once they have a choice, with an average bill saving of 17 per cent needed to entice them into the market. But three-quarters of customers said they would look to negotiate a better deal with their existing supplier when they were told this would be an option. A spokesman for Water UK told Utility Week: "Overall, we're confident that awareness is going to rise in the run-up to market opening. The companies really are stepping up their efforts now. It's a long, slow process, but everyone's on the case." LV ENERGY Two independents hike their prices Independent energy suppliers Ecotricity and GB Energy Supply have raised their prices on aver- age by 5.7 per cent and 30 per cent respectively. Ecotricity said electricity prices will rise by 7.8 per cent and gas prices by 3.8 per cent for its customers from 14 November. It blamed cost rises from grid operators and government policy. Meanwhile, GB Energy Supply has raised standard dual-fuel variable tariff prices from £820 to £1,060 a year, blaming increasing wholesale costs. A spokesperson said: "The cost of buying electric- ity has increased significantly in recent months. We've absorbed that rise for as long as we could, but are now having to increase the price of our variable tariff." Uswitch energy expert Claire Osborne said: "Co-operative Energy was the first large sup- plier to increase variable prices in two years and, with GB Energy's latest hike, we could see more providers follow suit." WATER Cherry-picker alert for household retail The water sector must beware of retailers "cherry-picking" customers in a competitive household market, as it can cre- ate "an awful lot of switching for no actual benefits", according to Craig Lonie, a partner at econom- ics consultancy Oxera, speaking at a water sector conference. "The incentive for new retail- ers to cherry-pick in industries like this is very strong," he said. Lonie drew attention to other sectors that have suffered from cherry-picking, such as telecommunications. For the first decade, the sector saw new entrants take on customers for whom service was cheaper to deliver, he said, which failed to create value in the industry. He pointed out that Ofwat's cost-benefit analysis was for a 30-year period, and that aer ten years, the telecoms industry was no longer anti-competitive. ENERGY Energy UK launches prepay principles Energy UK has launched ten improved standards for prepay- ment customers, to improve safe- guards and identify vulnerability. The renewed standards ensure suppliers are monitoring prepay accounts to identify cus- tomers at risk of facing financial difficulties. Suppliers may also provide discretionary credit and signpost customers to debt advice and financial support. The big six suppliers are signed up to the principles along- side Bristol Energy, Co-operative Energy, Ecotricity, Good Energy and Utility Warehouse. Small business: awareness particularly low I am the customer Jonathan Kini "SMEs want better access to renewable energy" Small and medium-sized enter- prises (SMEs) are the lifeblood of the UK economy, accounting for about 99 per cent of businesses in all main industry sectors. What's more, the number of SMEs is growing fast – there are now almost 5.4 million in the UK. It therefore astonishes me that so many are dissatisfied with the products and services they receive from their energy suppliers. These are important customers, and I felt we needed to understand them better. stimulate a switch, aer price and service. These findings suggest small businesses have recognised the commercial and social impor- tance of greater sustainability, so we in the energy sector need to respond by helping them to reduce their energy usage – and therefore their bills – and by sup- plying 100 per cent renewable energy. It's important to them, so it has to be important to us. Jonathan Kini, chief executive, Haven Power It is perhaps unsurprising that less than a quarter (23 per cent) believe they are receiving an excellent deal in terms of price, and seven in ten (71 per cent) think it's difficult to switch supplier. But, interestingly, our report revealed a significant majority of SMEs want better access to renewable energy – but can't find a supplier to provide it. While almost three-quarters (72 per cent) say they would like energy suppliers to be more committed to renewable energy, only 11 per cent would rate their current supplier as 'excellent' in this regard. In fact, the offer of renewable energy is the third most important factor likely to 24 | 21ST - 27TH OCTOBER 2016 | UTILITY WEEK

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