Utility Week

Utility Week 20th October 2017

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Customers 24 | 20TH - 26TH OCTOBER 2017 | UTILITY WEEK Digitisation is now a "funda- mental requirement" – rather than a desire – for the utilities sector, according to one of its most senior figures. Speaking at Utility Week's Con- gress event in Birmingham last week, Thames Water chief execu- tive Steve Robertson said digitisa- tion is transforming the customer relationship. He said: "For the tel- ecoms market, horizontal integra- PAN-UTILITY Thames CEO: digitisation a 'fundamental requirement' for utilities tion has completely transformed profit pools and it has become the definition of the industry. We can see how that wave is going to potentially change the way we, as utilities, operate and relate to our customers." The convergence of different value models in the utilities space is something the sector is going to have to learn "to embrace", Robertson added. "When we look at the chal- lenges of growth and climate change, the opportunities of digitisation and the way it allows us to predict, automate and optimise, becomes less and less of a nice thing to have and more and more of a fundamental requirement," he said. Digitisation can also help water companies deliver impor- tant messages to customers. This week Customers 'being left to sink into debt' Firms only intervening after allowing customers to rack up average unpaid bills of more than £600 Suppliers are leaving customers to rack up average debts of more than £600 in unpaid gas and electricity bills before stepping in to help them make repayments. For a number of companies the figure exceeds £800, Ofgem found in its latest annual report on the treatment of vulnerable customers. The average amount owed on electricity accounts before intervention from a supplier rose by 7 per cent over the past year to £628, while the average figure for gas accounts grew by 5 per cent to £622. Ofgem singled out Npower, Utility Warehouse, Ecotricity, iSupply Energy and First Utility as the worst performers on electricity, and Npower, Utility Warehouse and Spark Energy as the worst performers on gas. The regulator urged the suppliers to "reflect" on their perfor- mance and "act quickly" to address the issue. "Paying off energy bills is a major concern for many customers in vulnerable situations," said Rachel Fletcher, Ofgem senior partner for consumers and competition. "When suppliers let big debts accrue, it's a sign that they're not spotting debt or stepping in early enough to help customers who are struggling to pay bills. "We want industry to demonstrate that it is identify- ing and supporting these customers in a timely way. We will be monitoring suppliers to make sure they make long-term improvements on bringing down debt." The report says suppliers are making good progress in some areas. The number of customers in debt dropped by 9 per cent for gas to around 970,000, and by 3 per cent for electricity to less than 1.2 million. Following a crackdown by the regulator, disconnections for debt fell to just 210, down from a peak of 8,300 a decade ago. TG ELECTRICITY Switching up 46% as engagement rises Consumers are becoming more engaged in the energy market, with the latest figures from Energy UK showing that more than 550,000 customers switched electricity supplier in September. That figure is up by nearly half (46 per cent) year on year and means more than four million customers have changed electri- city supplier so far this year. Recent data from Ofgem also reveals higher levels of con- sumer engagement in the energy market. The regulator found that 41 per cent of customers have engaged with the market this year, up from 37 per cent in 2015. Furthermore, a third of switch- ers changed supplier for the first time in the past 12 months. With three months of the year still to go, the overall number of switchers is likely to eclipse last year's total of 4.8 million. ENERGY Ofgem extends price cap for vulnerable Ofgem has extended its price cap for customers on prepayment meters to 1 million more vulner- able households. The safeguard tariff, which will apply to all customers receiv- ing the Warm Home Discount from a supplier large enough to be required to participate in the scheme, will be in place by February 2018 and will save cus- tomers on average £120 a year. The regulator said it would work with the government to introduce a market-wide price cap for all customers on standard variable tariffs (SVTs) following the introduction of leg- islation, as promised by Theresa May at the Conservative party conference earlier this month. Ofgem will consult on the form of the cap while the legisla- tion is passing through parlia- ment, and urged suppliers to shi customers off SVTs in the meantime. ENERGY Flow offers green tariffs as standard At least half of all electricity sup- plied to domestic customers by Flow Energy will now be sourced from renewables, the independ- ent supplier has announced. Customers also have the option to upgrade their current tariffs to include 100 per cent renewable electricity at a cost of roughly £2.50 per month for the average household. "Sustainability in energy is our biggest driver, whether that's green energy, realistic pricing or improving the industry's reputa- tion so that customers feel they can engage with their energy supplier in a positive way," said Flow Energy managing director Andrew Beasley. "Eighty-five per cent of our customers say that having a higher proportion of renewable electricity in their tariff is a good thing, and we'll continue to invest in our renewable offer." Concern: suppliers not stepping in early enough Citing Thames Water's recent 250m "fatberg" discovery in east London, Robertson explained how it became a media sensa- tion that enabled the company to highlight the water sector's campaign to ensure no unwanted products get flushed away. "The stats are staggering – over a bil- lion people on our planet have found out about it and it has had 400 million Twitter impressions."

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