Utility Week

Customers 26 | 12th - 18th MAY 2017 | UtILItY WEEK Moneysupermarket has claimed Conservative plans to introduce an energy price cap could mean the end of many cheap fixed- rate tariffs. The website's energy expert, Stephen Murray, said a cap would "push many cheaper tariffs out of the market", resulting in higher prices. "For customers who have the ability to switch, an energy price cap would be a disaster," added Murray. EnErgY Energy price cap could be a 'disaster', warns comparison site "Industry statistics tell us around two-thirds of UK households are on expensive standard tariffs, with many paying quarterly. Savings for these customers are over £300 on average, or 25 per cent of their bill, yet many still do not switch. "The energy market is working better than many people give it credit for. There is more choice for consumers, more innovation by suppliers and an effective switching industry, with 50 suppliers to choose from and huge savings to be made. A price cap, whether relative or actual, will lead to many of the best deals disappearing, prices finding a higher level and a growing market of disengaged customers," he added. The Conservatives have confirmed they are planning to include an energy price cap in This week Ofwat to bolster role of customer in PR19 Customer challenge groups have an 'enormously important role' to play in price reviews Water regulator Ofwat has said it will build on the role of customer challenge groups (CCGs) in its next price review – PR19. "We see CCGs as having an enormously important role, and we think they have been a very positive development in engagement with companies and how that timely information flows," said John Russell, Ofwat's senior director of customers and casework. "We are going to be building on that by making sure they have access to the right kind of information, and that they are really challenging companies." The regulator has committed to revamping its service incentive mechanism (SIM) into a "customer experience measurement" as part of an approach to encourage water companies to "own the relationships with their customers". "That is a key thing we developed in PR14, and is definitely something we are going to be pushing much harder," said Russell. Customer challenge groups, he said, will play a vital role in making sure that the new customer experience measurement is targeted in the right kind of way. This will help ensure that the regulator gets the right kind of feedback needed for developing its new mechanism. "CCGs are definitely an important part of the regulatory architecture and landscape," added Russell, "and we think they have been a really positive move from PR14." LV WAtEr Scottish Water's new customer forum Scottish Water has signed an agreement with the Water Industry Commission for Scotland and Citizens Advice Scotland (CAS) to establish the next Customer Forum for Water. The forum will ensure the interests of customers and communities are represented in the forthcoming review of charges 2021-27, which sets prices and levels of service for Scottish Water. As an independent entity, it will work closely with Scottish regulator Wics, the Consumer Futures Unit of CAS and Scottish Water. WICS' chief executive Alan Sutherland said: "Engagement can only truly be effective if customers are empowered to take meaningful decisions. The Forum seeks to do just that. It will be even more integral to the price-setting process than ever." PAn-UtILItY Smart meter cyber risks a pressing issue Almost two-thirds of UK businesses are "significantly concerned" about the cyber risks associated with smart energy technology, according to the latest B2B energy survey by PwC. The findings also reveal that more than half of British firms are worried their client data is not being handled securely by their energy supplier. Three in five businesses would switch supplier if their provider fell victim to a cybersecurity breach. According to PwC cyber specialist Niko Kalfigkopoulos, one way to ensure the security of supply is by introducing industry-standard product assurance, allowing smart energy meter suppliers to label their devices as "approved", thereby reducing exposure to risk if a customer adds "unapproved" devices to their network. "With around a third of industrials and over a fi£h of commercial organisations planning to spend more than £1 million on smart energy technology, the need for suppliers to get their cyber house in order is vital," he said. EnErgY Engage or become obsolete, warns EY Energy companies must engage with customers or risk becoming "obsolete" and "irrelevant", Yunus Ozler, a partner in power and utilities at EY, has warned. He said the sector must recognise that customers "can power themselves if they choose". Ozler said the growth of more empowered customers can already be seen in the commercial sector, with companies like Apple generating renewable energy themselves. "We need to move the dialogue away from prices and tariffs towards technology-empowered customers who can innovate." Customer challenge groups will play a vital role their upcoming general election manifesto. "Instead of bringing in a price cap, the government should spend some money raising awareness of switching and leave the mechanics of a vibrant and competitive market well alone," said Murray. Consumer group Which? has said that any energy price cap the Conservatives are planning should have a cut-off date and not stifle competition.

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