Utility Week

Utility Week 22nd September 2017

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4 | 22ND - 28TH SEPTEMBER 2017 | UTILITY WEEK Electricity customers switching supplier Almost half a mil- lion electricity cus- tomers switched supplier last month, according to data released by Energy UK. 444,653 customers switched supplier in August, taking the total for 2017 so far to nearly three-and-a-half million. 30% more customers switched supplier compared with August 2016. 3.4m customers switched during 2014, which has already been surpassed by year- to-date figures for 2017. 37% of total move- ments between suppliers in August saw customers switch from larger to small and mid- tier companies. STORY BY NUMBERS Seven days... National media Britain faces high winter energy prices Energy bills in the UK could be set to rise this winter aer the cost of power jumped well above last year's prices. The wholesale cost of winter electricity in the UK market is on average 16 per cent, or around £7/ MWh, higher than it was this time last year. The price rises could spell trou- ble for British bill payers who faced a flurry of tariff hikes over the spring following last winter's volatile energy trading. The Telegraph, 18 September PwC's role advising Ofwat scrutinised Big four accountancy firm PwC is facing criticism over potential con- flicts of interest aer advising Ofwat at the same time as several water and sewerage companies. The con- cerns centre on the formal review that Ofwat conducts every five years and which sets the prices water companies charge customers over the subsequent half-decade. During the three years up to 2015, Ofwat employed PwC as its "delivery partner" to assess pricing for the 2015-20 period under a £6.45 mil- lion contract. Financial Times, 17 September Nimbys don't want mini nuclear stations Most Britons would not be happy living near the mini-nuclear power stations that Rolls-Royce and sev- eral other international companies want to build in the UK, a survey has found. The government has promised the developers of modular reactors a slice of a £250 million funding pot in a race to position the UK as the place where the first generation of the power stations should be built. The Guardian, 18 September Gas distribution networks defend RIIO returns G as distribution networks (GDNs) have mounted a robust defence of their profits, with Cadent arguing that it has delivered "a step change in customer outcomes". The comments come in the wake of high-profile criticisms of energy networks' "excessive returns". According to analy- sis by the Energy and Climate Intelligence Unit, the networks are making an average 32 per cent profit margin. However, the Energy Networks Association branded the analysis "deeply flawed". In its response to Ofgem's consultation on the next regula- tory settlement, RIIO2, Cadent wrote: "The financial returns seen so far in RIIO-GD1, with some companies achieving low double-digit RoRE [return on regulated equity], have been the result of GDNs responding to the incentives within the regime to deliver significant service improvements while also driving cost reductions for customers, with 37p in every £1 of effi- ciency savings being returned to customers. "If they had not responded to these incentives, they faced significant financial penalties which would have seen their financial returns fall to around or below the cost of debt." In its response, Northern Gas Networks wrote: "A guiding principle of RIIO clearly set out by Ofgem… was that the median GDN should have the potential to earn double-digit RoRE. "This principle has proved to be a very strong incentive for securing shareholder funding for initiatives to deliver improve- ments during RIIO-GD1 and will enable Ofgem to return significant value to customers at GD2." Asked in a recent interview with Utility Week whether networks were making too much money, Ofgem chief executive Dermot Nolan said: "The whole principle of the RIIO price con- trol is that a company that really delivers for consumers is entitled to earn a good return." EB "Any disruption to those arrangements could have implications for security of supply" EDF's corporate policy and regulation director Angela Hepworth to the House of Lords energy and environment select committee inquiry on the impact of withdrawing from Euratom.

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