Utility Week

UTILITY Week 10th February 2017

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Customers This week Npower hikes dual fuel prices by 9.8% Supplier says wholesale prices rises and government policies left it with no choice Npower has bumped up the price of a typical annual dual fuel energy bill on its standard variable tariff by 9.8 per cent – or £109. The supplier blamed the increase on rising wholesale prices and the growing cost of government policies such as the smart meter rollout and the capacity market. It said the trend is set to continue as network and policy costs come to make up an increasing share of energy bills. The price hike is made up of an average rise of 4.8 per cent for gas and 15 per cent for electricity. It includes a £55 increase to the standing charge for electricity, which Npower said would bring it "in line with the rest of the market". The new charges will come into effect on 16 March and will affect roughly half of Npower's 2.8 mil- lion customers. They will not hit vulnerable customers until May and prepayment customers will be unaffected. The supplier last raised its standard variable tariff in October 2013. Npower's price increase prompted widespread criti- cism. Government said it was "concerned" and Ofgem reiterated the need for suppliers to "justify" bill hike. The Energy and Climate Intelligence Unit told Utility Week it was "bizarre" for Npower to partially blame its actions on the Capacity Auction. The unit's director, Richard Black, said: "For one thing, this week's capacity auction has seen the lowest prices ever – far lower than most onlookers expected and raising questions about if it was even needed – but in any case, there's no inherent reason why the capacity market should lead to any noticeable increase in peo- ple's bills." TG EnErgy Smart meter early adopters happy UK customers who have already received smart meters display a high level of satisfaction with their devices, according to a report from Smart Energy GB. Based on a survey of 10,000 adults in the UK, 81 per cent of those with a smart meter would recommend them to others. Respondents on lower incomes were even more likely to recom- mend them (88 per cent). The findings are part of a bi-annual update delivered by Smart Energy GB, the organi- sation responsible for public awareness about the rollout. Other highlights of the report were that 82 per cent of those who received a smart meter said they had taken at least one step to reduce energy usage, and that 87 per cent believed they had a better idea of what they were spending on energy. WatEr Water bills set to rise by 2% country-wide Water companies in England and Wales have announced an average bill increase of 2 per cent, to come into effect in April. Water UK published figures stating that the average house- hold water and sewerage bill in England and Wales for the coming year would be £395, an increase of £6 on the previous year. South West Water's bills will be the highest (£491) and Severn Trent's the lowest (£341). These compare with an aver- age bill rise in Scotland of 1.6 per cent, announced last month. The prices are in line with the five-year plans developed by every water and sewerage company aer consultation with customers, and confirmed by Ofwat in 2014. Those plans will see companies deliver a 5 per cent average drop in prices in real terms between 2015 and 2020. Over that period, firms will also invest £44 billion in ser- vices, resilience and environ- mental improvements. gaS Ofgem: cut prepay tariffs by up to 15% The energy regulator has con- firmed that the initial levels for a price cap on prepayment meters will require many suppliers to cut their gas charges by 10-15 per cent. The proposed cap should save the typical prepay customer around £80 a year, according to Ofgem. The precise levels of the cap will vary with meter type and region. Ofgem's clarification of the initial levels for the price cap comes ahead of its implementa- tion in April. It is expected to affect four million households. The cap was recommended by the CMA following its two-year investigation into the energy market. It is a temporary measure lasting until 2020, until smart meters are rolled out. Crunching the numbers: will others follow? 22 | 10th - 16th FEbruary 2017 | utILIty WEEK Earls Gate Water, a subsidiary of chemical company CalaChem, has become the first non- household water customer in Scotland to apply to provide its own retail services. Scottish regulator Wics said it was already "minded to grant" a licence to Earls Gate Water, which hopes to start provid- ing its own retail services from March. WatEr Chemicals company applies for first Scottish self-supply licence The company has partnered with Scottish retailer Everflow, which will take on responsibili- ties for the retail functions for a much-reduced charge in com- parison to regular retail services. These include meter reading, central market operating system transactions, and wholesaler management. Everflow customer services director Josh Gill told Utility Week: "Self-supply is the best way forward for all large users of water in Scotland and England. Retailers oen try to mask the processes with complexity but in reality it is a great way to save money. We think it reduces cus- tomers' costs if they are spend- ing over £500,000 on water." He added: "We believe that large corporations, which have the resources, can really benefit from having a direct relationship with the wholesaler." As a self-supply licensee, Earls Gate Water will be able to purchase water directly from Scottish Water, avoiding the retail margin added by sup- pliers, and it will become a member of the Central Market Agency, with voting rights and the opportunity to influence the market.

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