Utility Week

Customers UTILITY WEEK | 24TH - 30TH NOVEMBER 2017 | 21 This week Ofgem to investigate SSE's tariff messaging Energy regulator will consider the company's annual statements to its prepayment customers Ofgem will investigate whether SSE failed to provide accurate information on annual state- ments about the cheapest tariffs available to customers, as required by the regulator's licence conditions. The information companies must provide includes the tariff customers are on, details of their annual spend and whether they can save by switching to the supplier's cheapest tariff, if they are not already on it. "This gives customers the crucial information they need to manage their account, and helps prompt them to switch supplier for a better deal. Suppliers are also required to take all reasonable steps to provide informa- tion that is complete, accurate and not misleading," Ofgem said. But it acknowledged the opening of the investigation "does not imply" it has made "any findings about non-compliance". A customer first approached Ofgem about the matter in July. On the day the regulator opened the investiga- tion, it closed an unrelated one dating back to July 2016, into SSE's processes around switching about 1,800 customers to prepay meters in 2014 and 2015. Ofgem found SSE did not take some customers through the appropriate processes before arranging with them to have a prepay meter installed, including some who were in, or at risk of falling, into debt. But it said the supplier had since improved its training and call monitoring processes. SSE has offered to compensate 337 customers who paid more because they had a prepay meter installed. AC ENERGY Safeguard cap could miss 500,000 homes Half a million low-income households face missing out on savings from Ofgem's proposed new safeguard price cap, fuel poverty charity National Energy Action (NEA) has warned. Research, published to tie in with the launch of NEA's winter Warm Homes Campaign, esti- mated that more than 500,000 eligible households will not be protected under Ofgem's pro- posed tariff. This is because they are the homes of adults of working age and so do not automatically qualify for the Warm Home Dis- count (WHD), which is the basis Ofgem plans to use to determine eligibility for the safeguard tariff. The number of households receiving the WHD is capped and smaller suppliers do not have to provide it – meaning their cus- tomers will be unable to access the safeguard tariff, says NEA. The charity said missing out on the WHD and linked safe- guard tariff savings will leave low-income households approxi- mately £260 out of pocket. WATER Investment at record levels at Welsh Water Dwr Cymru Welsh Water has invested record levels in its water and wastewater services to improve the service it provides to customers, according to the company's half-year results. It invested £196 million between April and September 2017 and plans to invest a total of £400 million in the year to March 2018. The company said it was now investing "more than ever before" with more than £1 million a day being invested across 400 different schemes. Welsh Water is also helping to fund a range of social tariffs that lower bills for more than 90,000 customers who "genuinely strug- gle" to pay their water bills. ENERGY Timetable updated for 'sticky' database Ofgem has updated suppliers on the timetable for the creation of the "sticky" customer database proposed by the Competition and Markets Authority (CMA), following its two-year probe into the energy market. The regulator said larger sup- pliers should be ready to transfer the information necessary to start populating the database by April 2018. In a letter setting out the revised timetable, Ofgem chief executive Dermot Nolan wrote: "We are moving ahead to create a database of customers who have been with their energy sup- plier on a default tariff for more than three years, in line with the CMA database remedy." Prepay meter: subject of previous probe into SSE I am the customer Tony Smith "We've called on Ofwat to avoid being over-generous" Ofwat has made much of its determination to hold down bills for customers at the 2019 price review. Next month we'll get our first indication of just how serious the regulator is about realising that ambition, when it publishes its assumption on the cost of capital for 2020 to 2025. This announcement will be watched closely by water compa- nies, but it should matter to cus- tomers, too. Within its five-yearly price determinations, Ofwat makes an assumption of the costs tion. But companies' financial performance since 2015 shows they are still raising finance at a cost lower than the regulator assumed. Outperformance on outcome delivery incentives could add to these returns. In December, Ofwat has the opportunity to show it is deter- mined to strike a fairer balance between the interests of custom- ers and investors. We're working hard to make sure it does that. Tony Smith, chief executive, Consumer Council for Water water firms incur to raise finance from investors and lenders. Each 0.1 per cent increase in the cost of capital can add about £2 per year to the average bill. In the past, the regulator has overestimated this cost at cus- tomers' expense. Since the water industry was privatised in 1989, Ofwat's generosity has been reflected by the fact the listed water companies have produced returns higher than the average on the FTSE share index. This is despite the relatively low risk of investing in the water industry. We've repeatedly called on Ofwat to avoid being over- generous; the last price review in 2014 was a step in the right direc-

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