Utility Week

Utility Week 24th February 2017

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Page 23 of 31

Customers This week Ofgem trials sticky customers database CMA-recommended system will be trialled alongside 'best offers' letter from Ofgem Ofgem has begun trials to implement the unpopular sticky customers database remedy pro- posed by the Competition and Markets Authority (CMA). Ofgem's approach will test the effectiveness of two different database solutions. One will exactly reflect the CMA's recommendation, the other will test an alternative approach that seeks to take advantage of Ofgem's "trusted voice" and support easy comparison of energy deals. The introduction of an Ofgem-administered database of disengaged customer details was recommended by the CMA aer a two-year investigation into energy mar- ket failings in the UK. The intention is that the database will hold the details of all customers in the UK who have been on standard variable tariffs for some time, and suppliers should be allowed to access these details to contact customers and urge them to save money by switching supplier or tariff. The idea was widely criticised when the CMA's find- ings were released in June 2016. Many energy industry representatives labelled the remedy a "spammers' char- ter". There are also concerns about data protection. Ofgem's alternative database trials seek to address some of these concerns by limiting the number of letters suppliers are allowed to send to customers and by trying a tweaked marketing methodology. This will test the effectiveness of an Ofgem-branded "best offers" letter instead of communications from individual suppliers. The Ofgem letter will set out three personalised energy deals chosen by the regulator that it believes offer better value for money. JG GAS Calls to fund gas connections via Eco UK gas distribution networks have called for amendments to the Energy Company Obligation (Eco) so it can be used to fund connections to the gas grid for the fuel poor. The request comes in the wake of a report commissioned by the networks and delivered by fuel poverty charity National Energy Action. It argues that almost 10,000 vulnerable house- holds in the UK would achieve £142m in lifetime savings on energy bills if government included a fund of £37.5m under the next phase of Eco for gas grid connections. The Eco scheme is designed to deliver energy efficiency measures in low-income house- holds. The government recently confirmed that the scheme will be extended to end in September 2018 rather than April 2017. ENERGY Councils create local energy scheme Leicester City Council and Leicestershire County Council have revealed plans to create a not-for-profit energy scheme to help combat fuel poverty and encourage poorer residents onto cheaper tariffs. The partnership has been in the works since December 2015 when the councils agreed to put out a joint tender for a suitable energy supplier. They are due to sign a memorandum of understanding agreeing to joint governance of the scheme and the appointment of a supplier, which has not yet been named. As well as a standard tariff, there will be a renewable energy tariff, in recognition of both councils' commitment to the climate change agenda. In November last year, Liv- erpool City Council announced plans to form a community energy company offering the "white-labelled" tariffs of Robin Hood Energy, the municipal energy company set up by Not- tingham City Council. WATER Gas supplier granted water retail licence Regent Gas subsidiary Regent Water has become the first energy firm to receive a water retail licence, letting it partici- pate in the open water market. Ofwat confirmed on 16 February that it had granted the company a water supply and sewerage licence, bringing the number of companies licensed to operate in the market to 16. A further eight have applied. A few energy suppliers have expressed tentative interest in the water market. Yu Energy, D-Energi, Xcel Energy and Corona Energy all have plans Most, however, remain uncon- vinced about the opportunities that there are at present, and refuse to commit themselves to any sort of plan. Sticky customers may receive 'best offer' letters 24 | 24TH FEBRUARY - 2ND MARCH 2017 | UTILITY WEEK Applications for self-supply licences look set to rise aer brewer Greene King partnered with consultancy Waterscan to provide its own water retail ser- vices when the market opens. Waterscan director Claire Yeates told Utility Week there are "certainly" more self-supply deals on the horizon. "The press that Greene King received has sparked an interest. We've had WATER More self-supply licence applications are 'on the horizon' more conversations and more businesses are now considering this as an option," she said. Waterscan is looking to engage with more business customers about the self-supply option, and has made commit- ments to a number of them. On 23 January, Greene King became the first non-household water customer to apply to Ofwat for a water supply licence and a sewerage licence, with a retail authorisation limited to self- supply. Greene King will pay wholesale prices – the price that retailers pay to the water com- panies – not the retail margin added by suppliers in the open water market – become a market participant, and be able to supply water services to multiple sites. The brewer and Waterscan have been working together on water reduction projects for a number of years. Although Greene King has applied for the licence, it has not ruled out the traditional procurement option. Yeates said: "It is only when we've got real visibility with the market and the pricing structure that they will then make a deci- sion as to which is the best route to go down." (See analysis, p26.)

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