Utility Week

UTILITY Week 10th February 2017

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UTILITY WEEK | 10Th - 16Th FEbrUarY 2017 | 13 Policy & Regulation This week Utility brokers 'should be regulated' Six-point voluntary water procurement adviser code of conduct aims to stop 'Flash harry' tactics Utility brokers should be regu- lated, either by the Financial Conduct Authority or by regula- tors Ofgem and Ofwat, to protect customers from "Flash Harry" business tactics, according to Peter Sceats, founder and direc- tor of water broker The Grand Union Water Company. Energy brokers "should be and should have been" regulated by either the Financial Conduct Authority or Ofgem, Sceats told Utility Week. "At the moment, they aren't. This has encouraged some of the most dreadful customer service I've ever seen. I call them Flash Harry business tactics, and they are at play in the energy market every single day." He also works as an electricity and gas expert witness, and said he has observed first-hand such tactics at play. Grand Union Water said it hoped to "keep such tactics out of the water market" and had co-founded the water procurement adviser code of conduct – a six-point voluntary code that brokers can sign up to. Inenco chief commercial officer Dave Cockshott told Utility Week he was "more than happy" with a voluntary code of conduct for brokers. However, he added: "The trouble is that many of the codes of conduct end up being rather lame and, therefore, why wouldn't you sign up to them? "If you're going to have a code of conduct it needs to have meaning and bite and make people nervous about signing up to it – that is when I think there is value in them. There's no point having a voluntary code that just says: 'I'll be nice to you'." LV GaS 'Difficult' position for UK in Brexit talks The UK's lack of long-term stor- age and dependence on imports during winter will put it in a "difficult" position when nego- tiating gas supply arrangements as it exits the European Union. The EU could impose fees, taxes and "severe and costly reg- ulation" on the pipelines used to import gas from the continent with "little risk of retaliation", says a new report by the Oxford Institute for Energy Studies. "Brexit is coming at a time when UK North Sea gas produc- tion is in terminal decline and the main UK storage facility is facing technical issues that will reduce its capacity with a pos- sible extreme outcome, namely total decommissioning," the report said. "These specific issues will make the Brexit negotiations even more difficult for the UK as far as gas is concerned." The report added that the UK has an "obvious" interest in maintaining integrated energy markets to limit the de-coupling of Britain's gas trading hub, the NBP, from its continental equiva- lent, the Netherlands-based TTF. EnErGY Innovators offered a 'regulatory sandbox' Ofgem has invited businesses in the energy sector to have their say on the possible creation of a new "regulatory sandbox". The proposed mechanism would allow businesses to trial innovative new products and services "without incurring all of the usual regulatory require- ments". Successful applicants would also be offered "bespoke" guidance on how to address regulatory barriers. Ofgem said a regulatory sand- box would help it to improve its understanding of new busi- ness models and the potential benefits to consumers. Over the long run it would also be used to adapt regulations to take account of future developments. The deadline for final expres- sions of interest from businesses is 17 March 2017. EnErGY Labour pledges cap on supplier charges Labour has promised to place a cap on the prices charged by energy companies if it wins power. Shadow chancellor John McDonnell made his comments to the BBC last weekend. Asked what he would do to respond to actions by suppliers to significantly raise prices – as Npower has announced it will do this March – McDonnell said he would introduce legislation to limit such increases. "We can't allow this to keep going on," he said. Cockshott: 'code should have meaning and bite' Political Agenda David Blackman "Energy companies are back in Westminster's firing line" The turmoil on Labour's front bench continues. York MP Rachel Maskell, the shadow environ- ment secretary who has only been in post since September, has quit her role over the govern- ment's EU withdrawal legislation. And by the time Utility Week is printed, the same issue may have prompted a return to the backbenches for equally short- lived BEIS shadow Clive Lewis. The need for yet another shadow cabinet reshuffle sparked rumours, denied by the to the tone his committee is likely to take in its final report. However, following Npower's announcement that it will hike its standard variable tariff by just over 9.8 per cent, shadow chancellor John McDonnell decided to re-release Ed's great- est hit (see above). With No 10 examining further moves to reform the energy mar- ket in the upcoming consumer green paper, it looks like energy companies are firmly back in the Westminster firing line. former Labour leader's office, that Ed Miliband was due to make a comeback in Lewis's role. Utility chiefs will be glad if they don't have to deal again with Miliband, who announced a plan to freeze energy bills at the 2013 Labour annual confer- ence, kicking off the current round of pressure on suppliers. Iain Wright laid into energy suppliers at a one-off inquiry last week into the implementa- tion of the Competition and Markets Authority energy market investigation. The BEIS select committee chair accused energy suppliers of being locked in an "abusive relationship" with their customers. Wright's words point

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