Utility Week

UTILITY Week 3rd February 2017

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Customers This week UTILITY WEEK | 3RD - 9TH FEBRUARY 2017 | 25 UK energy suppliers will be required to run experiments this summer targeted at motivating more customer engagement with energy, regulator Ofgem has said. The Competition and Markets Authority recommended that Ofgem instigate trials to find better ways of prompting dis- engaged customers to look for cheaper energy deals as part of its report on the energy market. ENERGY Ofgem: suppliers will have to run engagement trials this summer The authority found during its two-year investigation into energy market failings that two- thirds of customers who are on standard variable tariffs (SVTs) are paying far more than they need to for their energy. However, Ofgem has now passed responsibility for conducting engagement trials to suppliers. Rachel Fletcher, senior partner, consumers and competition at the energy regu- lator, explained: "By oversee- ing these trials, we will make sure that suppliers are doing everything they can to test ways to help these customers find bet- ter deals. This could be through switching supplier, or helping loyal customers find cheaper tariffs with the current supplier." Fletcher added that Ofgem perceives suppliers as holding Water retailers split on switching levels Views differ on the level of switching likely to occurinthefirstyearoftheopenbusinessmarket Water retailers have differing views on the level of switch- ing likely to occur in the first year of the open market, with some suggesting as many as 10 per cent of business customers could switch. Speaking at Utility Week's Water Customer Conference, Market Operator Services Limited (MOSL) chief executive Ben Jeffs said retailers had told the company they expect anything from 1 or 2 per cent to 10 per cent of customers to switch retailer in the first year of the open market. Anglian Water Business was among those who believed that switching rates would be relatively high – around 10 per cent. The company's managing director, Bob Wilson, told Utility Week: "We believe that when the water market opens, excellent customer service, consolidated billing, streamlined administration, and value-added offers are likely to become the key switching 'pull factors'." SES Business Water managing director Giuseppe Di Vita agreed, saying that while lessons from Scotland showed it took some time for businesses to fully engage in the open market, there was "no reason why switching levels shouldn't be far higher in England now that the benefits of competition have been proven". Northumbrian Water Group Business managing director Lucy Darch said the company expected around 5-10 per cent of the market would switch in year one, comprising mostly multi-site businesses. However, Cobalt Water operations director Scott MacLeod told Utility Week he expected switching rates to be much lower. He said he would be surprised if as many as 1 per cent of customers switched in the first year. LV ENERGY First Utility targets home services The UK's largest independent energy supplier, First Utility, has told Utility Week it aims to grow this year by launching new "home service" offerings. The first of these will be the launch of a bundled energy and broadband internet offer, which will be officially revealed this month. A company spokesperson explained that the new white label broadband package would use Talk Talk's network, but all billing and branding in customer communications would carry First Utility's name. First Utility has conducted a trial run for the broadband offer with a group of existing custom- ers in order to test what appetite there is for bundling energy and internet services. So far the outcomes from this "so launch" have been "promising", said the company. First Utility supplies energy to around 900,000 UK custom- ers and is the largest non-big six supplier in the market. ENERGY Companies partner to fight fuel poverty Two energy suppliers have joined forces to address fuel poverty with a not-fot-profit prepay tariff. Ebico and Robin Hood Energy – both independent and not-for- profit energy suppliers – have announced a new partnership that will provide a flexible, exit fee-free tariff option for custom- ers with prepay meters. Prepay customers include a large proportion of the UK's most vulnerable energy custom- ers and the supplier duo said their new tariff would offer unrivalled affordability. It is 8.5 per cent lower than Ebico's own existing prepay tariff. Profits made by the two com- panies from their jointly offered tariff, which will be called Ebico Prepay, will be re-invested in fuel poverty projects around Britain. WATER Inenco: brokers will play a 'vital role' Brokers will play a "vital role" in the business water market, by driving awareness and help- ing organisations benefit from changes, utility consultancy Inenco has insisted. In a column for Utility Week, the company's chief commercial officer David Cockshott said third party intermediaries (TPIs) will "drive engagement not only by improving awareness but also by shiing it into action". He was writing in response to comments made by Waterscan managing director Neil Pendle, suggesting that brokers have "no place" in the market. Cockshott said: "TPIs work best in partnership with suppli- ers, to make sure businesses are well-served, well-informed, and well-placed to benefit from an open market." See Pipe up, p17 Jeffs: retailers expect rates from 1% to 10% a "special responsibility" to engage vulnerable customers. Trials must address issues such as: informing customers of the cheapest market deals; tack- ling billing jargon, for example by changing the name of SVTs to "out of contract" tariffs; a lack of clarity in domestic billing more generally; and processes for informing customers when their fixed deal has ended.

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