Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/742644
UTILITY WEEK | 28TH OCTOBER - 3RD NOVEMBER 2016 | 3 Leader Jane Gray This week 4 | Seven days 6 | People & Opinion 9 Policy & Regulation 9 | News Ofgem asks if Energy UK is up to its task 10 | Lobby A round-up of this year's political party conferences 12 Finance & Investment 12 | News Prioritise post-Brexit spending, says Baggs 13 | Market view How Brexit could deter investors from putting their cash into utilities 14 Operations & Assets 14 | Market view A status report on networks and innovation from the LCNI conference 16 | Market view The road to effective DSR 20 Customers 20 | News Tempus Energy exits energy supply market 21 | Event Utility Week Congress learns about real world transformation 24 | Analysis Will water competition deliver any benefits to households? 27 | Market view Why utility providers must find new ways to innovate 28 | Market view Energy companies must support business customers' energy management efforts 30 Community 31 | Disconnector An affordability crisis will hurt utilities It was one of the great debates of the EU referendum campaign – would a Leave vote make consumers, especially the vulnerable in society, worse off? While the long-term outlook for this question is unclear, a recent surge in inflation, pushing up the cost of food, clothes and fuel, does indicate that a new crisis of affordability may be about to descend on significant parts of the UK population with regard to key goods and services. The affordability of utilities is no exception (see news, p4). At Utility Week Congress 2016, Richard Khaldi, senior director for cus- tomers and casework at Ofwat, warned that increasing numbers of water customers are reporting difficulty in paying their bills – one in five, up from one in eight last year (see full Congress report, p11). To further exacerbate this worry, Khaldi said that despite a drive toward reduced bills from the regulator and companies, it is likely that water bills will go up in the short term as RPI rises. Clearly this has implications for utilities. Bad debt is already soaring in the water sector, rising by 17 per cent in the past year, according to Khaldi. Meanwhile, in energy, levels of fuel poverty are also up. But a crisis in the affordability of utilities is not only a debt problem for companies. The sector's ability to transform and provide smarter, more sustainable solutions to infrastructure needs and customer experience relies on building trust and legitimacy. As more customers come under financial pressure, this will be undermined and relationships between customers and their utilities will be at risk of retreating into negative territory if they are not handled with extreme care. For energy suppliers, this could cause additional problems to the already beleaguered smart meter rollout. It could also block supplier plans to reinvent themselves as smart, diversified service and "expe- rience" companies. For water companies on the brink of deregulation, weakened legitimacy could cause angry questions about the commercialisation of water – access to which is a fundamental human right – and for energy networks it will make it harder to justify the expenditure of customer money on innovation schemes and infrastructure renewal for which most do not understand the need or the benefit. Utilities unanimously claim to be putting customers at the heart of their plans to transform. If affordability bites hard, this may require a change of tack. Jane Gray, Acting Editor, janegray@fav-house.com GAS 27 | Market view Why utility providers must find new ways to innovate WATER 10 | Lobby A round-up of this year's political party conferences 12 | News Prioritise post- Brexit spending, says Baggs 13 | Market view How Brexit could deter investors from putting their cash into utilities 24 | Analysis Will water competition deliver any benefits to households? ELECTRICITY 16 | Market view The road to effective DSR ENERGY 9 | News Ofgem asks if Energy UK is up to its task 14 | Market view A status report on networks and innovation from the LCNI conference 20 | News Tempus Energy exits energy supply market 21 | Event Utility Week Congress learns about real world transformation 28 | Market view Energy companies must support business customers' energy management efforts Visit the Downloads section of the website WNS: The UK Smart Meter Rollout http://bit.ly/2espIJ3 Webfleet: How SGN is set to save £1M with Webfleet http://bit.ly/2eh3HAL Certas: Balancing capacity market concerns : setting the record straight on fuel http://bit.ly/2essYnG