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UTILITY Week 17th February 2017

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Customers UTILITY WEEK | 17TH - 23RD FEBRUARY 2017 | 25 Most energy suppliers are not convinced the business water market will be worth entering when it opens in April, and say they have "no plans" to do so. In a straw poll, only Yu Energy, D-Energi, Xcel Energy and Corona Energy told Utility Week they had plans to enter the water market, while BES Utilities, Flogas and Robin Hood Energy said "maybe". PAN-UTILITY Energy firms unconvinced about water market opportunities The majority of suppliers, including Flow Energy, Good Energy, Hudson Energy, Haven Power, Engie, Dong Energy, Smartest Energy and Co-opera- tive Energy, all said they had "no plans" to enter the market. From April this year, around 1.2 million eligible businesses and public bodies in England will be able to choose their water supplier, an option currently available only to the largest users. It will link to the existing market in Scotland, which was created in 2008 as the world's first non-domestic water market. With an average retail margin of 6 per cent gross, it is unlikely that there will be enough money in the market to tempt the larger energy players. Of the big six, Eon, British Gas and SSE declined to com- This week EDF avoids Which? engagement survey Suppliers reveal plans to improve energy cus- tomer engagement to reinvigorate the market E DF is the only member of the big six not to have responded to a Which? campaign to improve transpar- ency around suppliers' customer engagement plans. The consumer watchdog launched its Fair Energy Prices campaign following the conclu- sion of the Competition and Mar- kets Authority (CMA) probe into energy market failings. It challenged suppliers to voluntarily submit details of their plans to improve engagement, which the CMA identified as problematic. It said suppliers need to work harder to show customers the benefits of switching. Which? contacted every supplier with more than 250,000 customers – which accounts for 19 companies – to obtain their engagement plans. In total, 14 suppliers responded to the call, including five of the big six. EDF was the only one of the group not to provide details. Explaining its omission, EDF said that encourag- ing customers to switch could be better achieved via a cross-industry engagement strategy, rather than getting individual companies to set out their own plans. It said: "We already see huge disparity in the number of customers on fixed tariffs across suppliers, and indi- vidual plans will continue to perpetuate the status quo." An EDF spokesperson also told Utility Week that EDF had "done more than most already" to promote engagement. The firm pointed out that 44 per cent of its customers were on fixed rate tariffs, one of the highest percentages among larger suppliers. All suppliers who submitted information to Which? also promised to share the results of engagement trials due to be carried out this summer at Ofgem's request. JG ENERGY Scottish Power raises prices Scottish Power has raised the cost of its dual fuel tariff by 7.8 per cent, effective 31 March. The supplier blamed "months of cost increases" for the hike, which will see electricity prices increase by over 10 per cent and gas prices by almost 5 per cent. Approximately one third of Scottish Power's customers will be affected. Meanwhile, British Gas, which was rumoured to be considering a significant price rise of its own, confirmed that it will freeze its prices until August this year. GAS Flow Energy to be sold off Flowgroup has announced that it will "actively pursue" the disposal of its energy supply business, Flow Energy, because of pressure on margins and a desire to pursue growth in its smart boiler business. The intention to sell Flow Energy, which has 250,000 customer fuel accounts, was revealed in a trading update. The statement said that, although the business "has progressed well and is delivering growth" wholesale market vola- tility had caused gross margins to come "under pressure". It added that this pressure was exacerbated because "we have priced to compete with a range of new entrants offering reduced tariffs to customers to gain mar- ket share". Given this operating environ- ment, the board of Flowgroup decided that disposal of its retail arm would be advanta- geous to the rest of the business. This includes a manufacturing enterprise for smart microCHP boilers, which the company believes have the potential to be "market-leading". Flowgroup said it has already "received a number of approaches expressing interest" in an acquisition. ENERGY 'Give loyal customers a 10% price cut' Outspoken energy select com- mittee chair Iain Wright has urged energy suppliers to give a 10 per cent discount to loyal customers. At a meeting of the BEIS select committee he said: "If you've stayed with the same energy company for, say, three years, and you've always paid on time, why shouldn't you get a 10 per cent reduction on your bill?" Wright confirmed that the scope for loyalty bonuses in the domestic energy market would be something the committee, which he chairs, will look into in more detail. The outspoken MP recently provoked controversy when he said that energy suppliers have locked loyal customers into an "abusive relationship". People fail to get excited about energy ment, EDF and Npower said they had "no plans", and Scottish Power had not responded to a request for comment at the time of going to press. Utility Warehouse said it intended to move into the domestic market if and when it was deregulated, but "at the present time we have no plans to enter into the business water market".

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