Utility Week

UTILITY WEEK | 2ND - 8TH FEBRUARY 2018 | 3 This week 4 | Seven days 6 Policy & Regulation 6 | News Brexit 'will threaten UK's energy security' 7 | Chief executive's view Nicci Russell, managing director, Waterwise 8 | Analysis The demise of Future Energy 10 | Analysis Will the Clean Growth Strategy deliver emissions cuts? 11 | Market view The key changes in PR19 13 Finance & Investment 13 | News £50m deal to drive Yorkshire innovation 14 Operations & Assets 14 | High viz Granville Ecopark AD 18 | Market view The pitfalls of substation leases 19 Customers 19 | News Customers 'bullied' to install smart meters 20 | Analysis Pensioners and fuel poverty 22 | Event The Water Customer Conference 25 | Market view Getting a grip on energy theft 27 | Market view Make communications count and don't rely on digital 28 | Market view EVs could be used to solve the very problems they introduce 30 Community 31 | Disconnector GAS 27 | Market view Make comms count and don't rely on digital WATER 7 | Chief executive's view Nicci Russell, managing director, Waterwise 11 | Market view The key changes in PR19 13 | News £50m deal to drive Yorkshire innovation 22 | Event The Water Customer Conference ELECTRICITY 6 | News Brexit 'will threaten UK's energy security' 10 | Analysis Will the Clean Growth Strategy deliver emissions cuts? 14 | High viz Granville Ecopark AD 18 | Market view The pitfalls of substation leases 28 | Market view EVs could be used to solve the very problems they introduce ENERGY 8 | Analysis The demise of Future Energy 19 | News Customers 'bullied' to install smart meters 20 | Analysis Pensioners and fuel poverty 25 | Market view Getting a grip on energy theft Pitney Bowes: Make self service smarter and more engaging http://bit.ly/2nAa2rC CGI: Demand side flexibility in UK utilities http://bit.ly/2hrMapA Knowledge worth Keeping Visit the DownloaDs section of Utility week's website http://www.utilityweek.co.uk/ downloads Supplier failures will hit confidence The toppling of Future Energy at the end of January added fuel to fiery speculation in the energy market, already rife aer the closure of Brighter World Energy, about the potential for a significant shake- out in the crowded domestic retail arena – and the impact this might have on customers. There seems little doubt among commentators that more small supplier failures are waiting to happen. Some have got their finances in a mess and are struggling to reconcile direct debit payments with billing realities, and the cash needed to pay for business funda- mentals such as IT system licences and gas shipping costs. With a persistently volatile wholesale market and limited ability to achieve trading economies through scale, their prospects look bleak. Some small company leaders may choose to learn from Future Energy's fate and consider opportunities to cash in on the value of their limited customer bases by consolidating with peers while they still have a going concern to bring to the table. Looking at the hit received by Future Energy's investors by its closure, small supplier shareholders may be newly supportive of such schemes. Whatever company boards and their backers decide, though, the failure of three suppliers in two winters, with more on the cards, raises serious questions about consumer confidence in the energy market. Ofgem is outwardly confident its supplier of last resort mecha- nism means customers are appropriately protected when a retailer shuts up shop and as Utility Week went to press, the regulator announced Green Star Energy had stepped into the breach to take on Future Energy's 10,000 customers. But in the lead up to this deal, there were mixed feelings among industry sources around how easily a supplier of last resort could be enticed. One source noted Future Energy's recent decision to change its billing system had added a bundle of integration and expectation management issues to the prospect. In any case, a growing industry chorus is chanting that the resil- ience of otherwise of the supplier of last resort mechanism is beside the point. Ofgem should be doing more to ensure that new entrants are really fit to compete and serve customers sustainably, they say. While it may not be the regulator's role to pass judgements or advise on the strategies of individual companies, it certainly does have a duty of care for consumer confidence. If small suppliers continue to crash out, this will inevitably take a turn for the (even) worse. Jane Gray, deputy editor, janegray@fav-house.com Leader Jane Gray

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