Utility Week

UTILITY Week 27th January 2017

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26 | 27TH JANUARY - 2ND FEBRUARY 2017 | UTILITY WEEK Customers This week Some water retailers will fail, warns Ofwat Chief executive says trust in the market could be undermined if customers are treated badly Some water retailers will fail in the competitive non-household market, Ofwat chief executive Cathryn Ross has warned. Speaking at a media briefing in London, Ross said: "Retailers will fail. There will be people who are operating as retailers in the market who, ultimately, do not have a viable business model and who exit. That's normal, that's what happens in competitive markets." She said the important thing is to make sure that, if they do, customers are protected and do not "lose out" in terms of money or service. "We've got measures in place to ensure that that happens," Ross added. On 12 January, the regulator set out its plans for monitoring the business retail market, vowing to keep a close eye on retailers when the market opens in April, and "take action" against any form of misconduct. Ross reiterated these comments, saying: "If we have retailers who are mis-selling to or misleading customers, if they are not treating customers fairly, we need to come down on them like a tonne of bricks, because that is not only an issue for that retailer and its customers, it is an issue that could undermine trust in the entire market. We would take that very seriously." Ross was speaking at a briefing to discuss the publi- cation of new research from Ofwat, showing only a third of eligible business customers are aware of the changes happening in the water market. The industry has funded an awareness campaign, aimed primarily at small to medium-sized businesses, which launched on Monday (23 January). LV ENERGY Eon is best small business supplier Citizens Advice has named Eon the best energy supplier for small businesses in the UK based on its effectiveness in complaints handling. The consumer advocacy body recognised Eon at the same time as launching its new complaints- handling league table for the small business community. The chart ranks the 15 larg- est firms that supply energy to 10,000 or more small non- domestic customers on how well they deal with complaints. Eon's complaints ratio was 21.1 per 10,000 customers. SSE came second with 29 complaints per 10,000 customers. The sup- plier with the worst complaints handling is Extra Energy, with a ratio of 1,225.4 complaints per 10,000 customers. ENERGY Customers fear bungled switching Fears of bungled switching are reinforcing the two-tier energy retail market and preventing engagement, say regulators. Many customers, particularly those who are vulnerable, are stuck on costly standard variable tariffs because they worry they could end up worse off if they switch, according to Ofgem's senior partner for consumers and competition, Rachel Fletcher. Speaking at Utility Week's Energy Customer conference, Fletcher said: "All of the research we've done in Ofgem shows that one of the big factors preventing people from switching is the fear of it going wrong. "If you're managing a really tight budget and you face the prospect, for example, of double paying an energy bill one month, that could be the differ- ence between you keeping your head above water and sinking," she told conference delegates Fletcher said making switch- ing "seamless and reliable" would be a real "game changer". WATER Brewer to supply own retail services Pub retailer and brewer Greene King is the first non-household water customer to apply to pro- vide its own retail services when the market opens in April. The company has applied to Ofwat for a water supply licence and a sewerage licence, for self- supply. Greene King said the licence will enable it to "build on efficiency works already undertaken, whilst driving cost and consumption control in the next phase of its water manage- ment strategy". To facilitate its application, Greene King has entered a part- nership with Waterscan to take on the role and responsibilities for the retail functions. Ross: customers must be protected UTILITY WEEK | 27TH JANUARY - 2ND FEBRUARY 2017 | 26 The installation of gas grid con- nections and first-time central heating should not be funded through the Energy Company Obligation (Eco), a member of the Committee on Fuel Poverty has told Utility Week. The comments were made aer the Energy and Utilities Alli- ance (EUA) published a report that called on the government to amend Eco to support the instal- lation of first-time gas central heating in fuel-poor homes. GAS Gas grid connections 'should not be funded by Eco' Paul Massara, former Npower boss and a member of the Com- mittee on Fuel Poverty, rejected the idea, though he agreed that there is a case for increasing the amount by which the gas net- work can be expanded through Ofgem's Fuel Poor Network Extension Scheme. The EUA report said that for a household using electric storage heating with a heat demand of 10,000kWh, being connected to the gas grid could deliver annual savings of £922. Installing cavity wall insulation would save just £116 and annual savings associ- ated with solid wall insulation and lo insulation were thought to be £215 and £29 respectively. Massara, however, said EUA's projected savings from first-time central heating installations were based on "extreme cases". The trade body's headline savings figure was based on a cost of 4.6p/kWh for heat provided by gas and 13.86p/kWh for heat provided by an electric storage heater. It did not use the lower 7.21p/kWh rate for an elec- tric storage heater running on an off-peak Economy 7 tariff. Massara added that con- necting homes to the gas grid is "not very effective" if people are still living in "leaky, cold, damp houses". He said subsidising gas grid connections is questionable given the gas networks' decar- bonisation challenges – some- thing that is "expensive" to do.

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