Utility Week

UTILITY WEEK | 15TH - 21ST JUNE 2018 | 13 This week Bulb announces 5.1% price increase Renewable supplier lays blame for second price hike this year on wholesale gas and electricity costs Renewable energy provider Bulb has revealed plans to raise prices by an average of 5.1 per cent. The supplier blames the hike on "substantial increases in the wholesale cost of gas and elec- tricity", with the typical annual bill increasing from £879 to £923 – a rise of £4 a month. More than 450,000 bill pay- ers on Bulb's single Vari-Fair tariff will be affected. The change comes into effect on 12 August and all customers will have 60 days' notice of the price increase. Any new customers that switch to Bulb will pay the new rates. This is Bulb's second price increase this year. In February the company announced that all customers on the Vari-Fair tariff would be hit by an average 2.8 per cent price hike. It has said that, since that change, wholesale energy costs have increased by 21 per cent. The company, founded in 2015, has dropped its prices seven times in the past three years. The rise announced on 11 June is the third in the company's history. Bulb co-founder Hayden Wood said: "All our mem- bers receive 60 days' notice of the rise, double what Ofgem recommends. And because we don't charge exit fees, our members can leave at any time, at zero cost." On 10 May, Bulb emailed all its customers to warn them of a potential price increase. According to Bulb, its average customer pays £260 less than the average big six standard tariff. However, Peter Earl, head of energy at Comparethe- market.com, said it was disappointing to see smaller providers like Bulb joining the big six price stampede. NB ENERGY Ofgem urged to cut networks' profits Citizens Advice has urged Ofgem to cut the "excess profits" of network operators by a further £4.1 billion in the next round of price controls. The regulator has outlined plans to reduce networks' returns by about £5 billion over RIIO2. Citizens Advice said the cur- rent method for setting the cost of equity – the rate of return that Ofgem considers necessary to attract investment – is flawed. It said the equity beta for the sector – a measure of financial risk that is used to calculate the cost of equity – has been set too high. "Their revenue is all but guaranteed by regulators," the charity says. "And as lower risks require lower reward, this has material consequences. Regula- tors assumed a much higher risk than can be justified, with higher bills as a consequence." ENERGY SSE-Npower energy firm names its CFO Gordon Boyd has been appointed chief financial officer designate of the new British energy sup- ply and services company that Innogy SE and Scottish and Southern Energy (SSE) are to form, subject to shareholder and regulatory approvals. The announcement follows news in April that Bickerstaffe had been appointed chief executive designate of the new company, which will be made up of Innogy's Npower and the retail arm of SSE. Boyd will take up his new role on 4 July and will be "heav- ily involved in the planning and preparation for the formation and listing of this new British retail company" according to a statement from SSE. WATER Offences cost UU over £250,000 United Utilities has been fined £200,000 with additional costs of £54,000 at Bolton Crown Court for drinking water offences in 2015. At an earlier hearing on 30 January, the company pleaded guilty to twice supplying "inad- equately disinfected water" from the Sweetloves water treatment works in Bolton. United Utilities has apolo- gised for the incidents and said it has invested more than £150 million to prevent such events occurring again. The charges were brought by the Drinking Water Inspectorate. Marcus Rink, chief inspector of drinking water, said: "These were serious failures by the company to maintain control of water treatment processes." Bulb has cut its prices seven times since 2015 Stock watch 220 200 180 160 140 120 CENTRICA SHARE PRICE, FIVE DAY Oct 2017 Feb 2018 Jun 2018 CENTRICA SHARE PRICE, FULL YEAR Centrica shares shot up nearly 3 per cent to 148p as trading opened on Tuesday aer Jefferies upgraded the stock from "hold" to "buy". Analysts at the investment firm also raised their target price from 140p to 165p based on an indication from Ofgem that the regulator would take a "balanced approach" to the introduction of a price cap on default tariffs. 150 148 146 144 7 Jun 8 Jun 11 Jun 12 Jun Finance & Investment

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