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UTILITY WEEK | 10Th - 16Th FEbrUarY 2017 | 3 This week 4 | Seven days 6 | People & Opinion 8 | Utility Week Live 2017 The packed agenda of the UK's leading utilities exhibition and conference 13 Policy & Regulation 13 | News Utility brokers 'should be regulated' 14 | Q&A Former energy minister Charles hendry 15 Finance & Investment 15 | News Coal and gas win the most in early auction 18 Operations & Assets 18 | High viz Wessex Water's bristol road works 20 | Market view The legal obstacles that still lie in the path of hinkley Point C 21 | Market view The work of the European Network for Cyber Security 22 Customers 22 | News Npower raises dual fuel prices by 9.8% 23 | Analysis Is customer loyalty suppressing switching figures? 24 | Analysis Smart meter rollout piles the pressure on suppliers 27 | Market view Exploiting data intelligence Markets & Trading 28 | Market view Utilities need to partner with nimble high-tech start-ups 30 Community 31 | Disconnector GaS 8 | Utility Week Live 2017 The packed agenda of the UK's leading utilities exhibition and conference 27 | Market view Exploiting data intelligence WaTEr 13 | News Utility brokers 'should be regulated' 18 | High viz Wessex Water's bristol road works ELECTrICITY 14 | Q&A Former energy minister Charles hendry 15 | News Coal and gas win the most in early auction 20 | Market view The legal obstacles that still lie in the path of hinkley Point C ENErGY 21 | Market view The work of the European Network for Cyber Security 22 | News Npower raises dual fuel prices by 9.8% 23 | Analysis Is customer loyalty suppressing switching figures? 24 | Analysis Smart meter rollout piles the pressure on suppliers 28 | Market view Utilities need to partner with nimble high-tech start-ups WNS: The UK Smart Meter rollout http://bit.ly/2espIJ3 Hefty price rise leaves Npower exposed Npower jumped first in the industry's annual game of chicken this week, announcing a whopping 15 per cent price hike on electricity for customers on its standard variable tariff, and 4.8 per cent on gas. In a market fresh from a CMA investigation and still riding high on the political and media agenda, that means either breathtaking audacity or having no other choice. Let's be kind and assume the latter. There's a good chance Npower's hedging strategies have le it exposed – good deals are all very well for keeping the prices down for a fixed term, but if market prices move consistently upwards, there will inevitably come a day of reckoning. Npower has also been under considerable financial pressure, with customer losses arising from a series of service failings – a glance at the 2015 supply profit figures on Ofgem's website show the company lost £173 million on domestic supply, compared with the leader of the pack Centrica, which made a £574 million profit. This will have been driven by one-off restructur- ing costs but nevertheless, the pressure remains. The devaluation of the pound will not have helped if Npower chief Paul Coffey reports up to RWE HQ in euros rather than sterling. Add to that mounting costs for smart meters and other government programmes cited by the supplier, and it seems that Coffey and his team felt their hands were tied. In truth, there is a problem with the energy market, and it's not about one-off costs. With the prepayment meter price cap about to come into force and fixed-rate tariffs out of their hands, suppliers are le to make the bulk of their profit from the dwindling pool of disengaged SVT customers. But good business is about more than numbers. Yes, Npower has a commitment to its parent company to meet its budget, and that company has a commitment to its shareholders to return to profit aer a bruising 2015/16. But bringing the Cabinet, the regulator and the glare of public opinion back down on the industry with a headline-grabbing 15 per cent price rise for a basic and necessary commodity doesn't do anyone any favours. Npower has flouted public opinion and the cost to the industry, as well as its customers, will be high. It would have been better advised to follow the example of EDF and play a longer game, miti- gating an 8.4 per cent rise in power prices with a fix on gas charges, as announced last December. Will Npower be a lone outrider, singled out in the court of public opinion for inflation-busting price rises, or is it simply leading the charge? That's up to the other suppliers now. Ellen Bennett, Editor, ellenbennett@fav-house.com Leader Ellen Bennett CGI: Energy Flexibility Transforming The Power System by 2030 http://bit.ly/2bR3zXB Knowledge worth Keeping Visit the DownloaDs section of Utility week's website http://www.utilityweek.co.uk/ downloads