Posts Tagged ‘energy’
Well, customers will save around 3% on their average annual bill by 2030.
The Commons public accounts select committee reckon that this smart meter rollout will cost £10.6 billion for the actual meters, with households paying for the £11 annual running costs, plus the £215 cost of installation.
The committee predicts that consumers will save just 2% on an average annual bill of £1,328 until 2020, rising to £43 a year, or 3% by 2030. Of course, this is only dependent on whether customers are savvy enough to cut their energy consumption.
Who knows what will be going on in 2030? You can bet that the new meters will be redundant and out of date by then. Still, that’s not stopping anyone.
The Department for Energy and Climate Change reckon that households will save £18.5 billion over 20 years if they can see how much their energy is costing them. They overestimate how many people want to sit and gawp at an energy meter after they’ve finished work.
In addition to that, recent cuts to wholesale energy costs haven’t been passed on by the Big Six, so looking at an energy meter will inevitably make you hate your provider more.
Margaret Hodge, the committee chair, said: ‘The costs of installing 53 million smart meters will be borne by consumers through their energy bills. It will cost around £215 per home or small business over the next 15 years to install the meters – an additional cost people can ill afford.”
“Despite consumers footing the bill, they can on average make a saving of only 2% on the average annual bill of £1,328 until 2020. Even this is conditional on consumers changing their behaviour and cutting their energy use. The Department of Energy and Climate Change is relying on the consumer becoming more “savvy” in making decisions about using energy.”
“The department is depending heavily on assumed competition in the energy industry to control costs and deliver benefits. Relying on market forces to keep costs down may not be enough on its own to protect consumers. This is something energy companies don’t have a great track record on. Ofgem’s referral of the energy market to the Competition and Markets Authority reflected serious concerns about the lack
of real competition in the industry.”
The scheme is called MyEnergyCredit and has been launched by Energy UK and comes about thanks to a demand from Ofgem back in February.
Energy UK said that they want customers who have switched suppliers or moved home without leaving a forwarding address to get in touch with their old company if they suspect that they left money in an old account.
So basically, the initiative is: We’ve been sitting on your money for no reason so would you come and get it because we couldn’t be arsed giving it you back at the time.
That said, Energy UK announced changes to try and stop this from happening in the future, but as of now, there’s going to be a two-year deadline for collection of credit. If you don’t claim it, they’ll keep it. The Big Six say they’ll give the money to vulnerable customers, but don’t hold your breath.
Energy UK’s chief executive Angela Knight said: “We are urging former customers to come forward and make a claim. Customers who think they haven’t left a forwarding address or a final meter reading when they moved or switched should contact their old supplier.”
“The web site myenergycredit.com will help you do this. Inevitably, there will be some former customers who will not be found and so the major suppliers are announcing what will happen to credit balances from now on.”
“In future, after two years, the credit balance will be used to help vulnerable customers – and suppliers will make it very clear what is happening.
“By 2018, these new arrangements are expected to add up to around £65m of help to those in difficulties. The suppliers will kick start this process now by donating £38m for the first two years combined.”
Ofgem chief executive Dermot Nolan said: “Today’s industry announcement is an encouraging first step by the six largest energy companies to address Ofgem’s call to reunite customers with their cash. It is good news for consumers and if you think you could be owed money we recommend that you contact your previous supplier.”
“This issue is part of a wider challenge of delivering good customer service that the industry must crack if they are to rebuild customer trust and confidence. Failure to deliver on the initiatives announced today could trigger further action by Ofgem, including enforcement.”
npower are now allowed to continue making telesales calls to everyone after they cleared enough late bills, after Ofgem set them a target. The regulator basically said ‘sort that backlog out or we’re taking your mobile off you, and you can have it back at the end of term.’
The company had a backlog of 96,700 late bills at the end of August. Ofgem had ordered them to get below 100,000, as well as launching an investigation into the energy company. The only good thing about this, is that a load of staff might have got some lovely overtime.
While npower are allowed to make telesales calls, Ofgem haven’t called off the investigation. There’s still the issue of the woeful new billing system which initially saw npower getting three times the amount of complaints than the next company.
Now, the energy firm assure everyone that there’s only 62,000 customers awaiting late bills.
Roger Hattam, npower’s domestic retail director, said: “I’m pleased that we have met our commitment made in June to reach our billing performance target. We’re now billing over 98% of customers on time. However, the journey doesn’t stop here as we’re working hard to make even more improvements.”
Sarah Harrison, senior partner in charge of enforcement said: “Ofgem is encouraged to see that npower has met our targets aimed at reducing late bills and we note their progress on reducing complaint numbers. But this is only a first step to turning round their customer service and billing performance. We will monitor their progress and continue our investigation into the reasons why npower’s problems occurred.”
That’s the vibe The National Grid are giving out, as they’ve asked electricity suppliers to indicate how much more spare capacity they have for peak times this Winter.
It wants to be sure that it can muster through each side of Christmas without plunging us all into blackouts.
This scheme has been brought forward by a year, as the Grid have been coping with plant repairs, fires and closures of main power stations.
The idea that the country could face power cuts is going to put the shit up the government, who are already aware that a less-than-fully operational power generation is likely to cause issues.
As part of the greener incentives brought in, new power plants are taking their sweet time to get up to full capacity, while older, more polluting plants become decommissioned.
The jolly sounding Cordi O’Hara, National Grid’s director of UK market operations, reckons: ”At this stage we don’t know if these reserve services will be needed, but they could provide an additional safeguard.”
Power generators would have to prove they’d be available to provide additional electricity between 7am and 9pm from November to February, the months with the highest demand for the likes of lights and heating.
Still, at least bored couples can get off with each other during Christmas powercuts, which means even more September babies, eh?
EDF Energy have been gits and Ofgem has slapped their legs by ordering them to pay £3 million in compensation to benefit “vulnerable customers” after they’d been found guilty of breaching complaint handling rules.
The investigation followed an increase of more than 30% in the levels of complaints recorded by the company during the the introduction of a new IT system in 2011.
Ofgem found that, between May 2011 and January 2012, EDF didn’t have sufficient or correct procedures in place to adequately deal with, process, record and receive, all complaints in accordance with handling rules.
In English, that means customers had unacceptably long waiting times when calling them to tell EDF they are rubbish.
And if you wanted them to follow up your complaint, that wasn’t happening either.
When customers finally got through, EDF didn’t even make a record of all the required details for the complaints. Basically, customers may as well stuck their hand out of the window and tried to finger the moon.
Sarah Harrison, Ofgem’s senior partner for enforcement, said: “EDF Energy failed to have sufficiently robust processes in place when they introduced a new IT system and this led to the unacceptable handling of complaints. Their commitment to putting things right and paying £3m to the Citizens Advice Energy Best Deal Extra scheme and the Plymouth Citizen Advice Bureau’s Debt Helpline to benefit vulnerable customers is a step in the right direction to rebuilding consumer trust.”
That sounds alright doesn’t it? Sadly, this won’t ever happen because Labour are doing that thing where they say ‘when we get in power, we’re going to do all this amazing stuff’, when they know that they won’t get voted in, so they don’t have to actually implement anything.
They might as well say: ‘Under a Labour government, honest, hard working people can be certain that each town and city will have a unicorn mayor that shits £50 notes for everyone and each home will be fitted with a milkshake tap.’
Shadow energy and climate change secretary Caroline Flint said the current Government had helped to create a “broken energy market”.
She reckons that Labour will create a tough new regulator who will manhandle power suppliers and have the ability to cancel energy firms’ licences if they repeatedly commit the most “serious and deliberate breaches of their licence conditions which harm the interests of consumers”.
Flint is obviously playing to the gallery here, as everyone knows that we’re all irritated by the way the energy companies are currently doing their business thanks to crappy customer service, mis-selling, whacking prices up when they feel like it and all the rest.
Ofgem have issued 30 fines since 2001, which total in advance of £87m. That’s a lot of money to us, but presumably, energy firms have that kind of money down the back of the sofa in loose change.
Flint says that Labour’s reforms would see the regulator producing an annual scorecard for energy suppliers, reporting on the firms’ performance and identifying problem areas.
“The public have a right to be treated fairly by energy companies,” she said. ”Where firms fail to meet these standards, there must be tough and decisive action. Too often energy companies seem to view the regulator’s fines as a cost of doing business – not as a warning to get their act together.”
“Of course consumers must be compensated – but if energy companies persist in mistreating their customers they must know their licence could be on the line.”
Independent figures claim to show droves of households switching their energy supplier as the price of energy carries on going up.
Approximately 100,000 customers a month have swapped over from the big boys to an indie since last June. Snubbing the likes of npower, SSE, EDF, E.ON, Scottish Power and British Gas.
And according to the latest figures from the Department of Energy and Climate Change, 1.3 million customers and 866,000 gas customers have changed suppliers in the last three months of 2013.
And as if to rub it in, by switching his gas and electricity supplier to a company exempt from the charges slapped on domestic bills, Energy Secretary Ed Davey is now spared from paying the average £112-a-year green duty added to most domestic bills after he moved his account to a firm that does not have to pay it.
Maybe he should be doing something about stopping the Big Six being arseholes then, eh readers?
CEO Sam Laidlaw has been laying into Ofgem, saying that their estimate for the amount of profit BG stand to make from the average household this coming year (£106) is wrong.
He said it’s actually closer to £40 – 20% down on last year – and got very shirty indeed. It also didn’t appear to be making any moves to cut energy tariffs. WHAT A SURPRISE.
Laidlaw stroked his Arctic fox trimmed lapels, turned over in his bath of Cristal and said:
The Ofgem analysis is a theoretical analysis. What we are actually publishing today is the actual facts. We have been in discussions with Ofgem for a number of years about this methodology, which has its deficiencies and they recognise that it needs to be changed.’
But quibbling over Ofgem’s calculations doesn’t alter the fact that the warm weather was to blame for their slide in profits, and that they still have a responsibility to lower their prices so that customers don’t end up overpaying and in penury as a result.
Ricardo Lloyd from Which! issued his usual robotic statement, but it doesn’t look like anyone at BG will be listening. He said:
‘British Gas profits are down because of a warm winter, not lower prices.Energy companies must do everything they can to pass on any savings to their customers including falling wholesale and network costs.’
Shadow energy minister Jonathan Reynolds said that the energy market wasn’t working and added:
‘Britain’s hard-pressed bill-payers have seen their energy bills rocket, despite falling wholesale costs, while David Cameron sits on his hands and repeatedly fails to stand up to the big energy companies.’
The results of this CMA profits investigation can’t come soon enough, eh?
BG are blaming the mild weather for the slump. CEO Sam Laidlaw put down his chalice of claret and medium rare Wagyu steak and said:
‘With challenging trading conditions on both sides of the Atlantic in the first half, earnings will be lower in 2014 than in 2013. However, the group is well positioned to return to growth in 2015.’
However, operating profits dropping by a quarter is quite a big deal, isn’t it? And this is despite Ofgem arguing that energy suppliers are making more profit than ever off the average home – it goes up to £106 per household this year.
As the Big Six are coming under increasing pressure over household bills, not to mention the massive investigation into profits by the CMA, things must be getting a bit heated at BG.
Do we feel sorry for them that their profits are down?
Sorry, we can’t hear you for the cheering…
Ofcom has approved a £17bn upgrade for the UK’s electricity networks over the next eight years – but customers will save because the budget is lower than the energy companies have previously been allowed to spend.
£111 of our annual fuel bill is currently set aside to pay for network upgrading and maintenance. Ofgem say this will drop to £99 under the new cap.
But not everybody will save the same amount. It depends on what company runs the power network in your area. In the North West you could be getting a saving of £26, while customers in the South East might only get a piddling £5.
And also there’s no actual guarantee we’ll see this mythical £12 saving at all, as apparently private companies are quibbling with Ofgem about other aspects of the bill.
But, you know, we’ll take what we can get. Now all we have to do is find something to spend this imaginary £5-26 (or maybe £12 on). But don’t go mad at the shops, because you might not get it at all.
Ain’t life grand?
Ofgem has slapped SSE and UK Power Networks on the wrist for their inept handling of last year’s winter storm damage, and ordered them to pay out an extra £3.3million to the people affected – that’s on top of the £4.7m they’ve already paid.
Ofgem added that they would be doubling the minimum amount energy companies should pay out for storm-a-geddon power fails and warned that energy companies need to pull their fingers out and get their customers re-connected more efficiently.
They said that SSE and UKPN ‘could have done more to get customers reconnected faster and to keep them better updated on what was happening.’
Last year, thousands of SSE customers were reduced to shivering in the dark and huddling around a candle on Christmas Eve, but Ofgem said although SSE and UKPN were specifically and adversely affected by the weather, they were a bit crap at fixing things.
Meanwhile, SSE has reported a loss of 110,000 customers over the last three months. But they’re still not exactly cash strapped. It’s reporting a slight rise in earnings per share.
Will the Big Six profit bandwagon ever be derailed? Only the Competition and Markets Authority knows the answer…
Are you all set to have your mind blown? Ready to be told things that will make you scream with glee that someone is on your side?
The CMA have identified opaque pricing, the dominance of utilities and an uncompetitive retail market as the main negative factors of the industry.
Doesn’t that feel amazing? Finally, someone is sticking up for us all! They’ve translated our feelings into a succinct report! And, obviously, we should hand the CMA a degree in stating the bleedin’ obvious.
Their investigation into the energy market isn’t finished yet and they’ll publish a final one before Christmas Day in 2015.
“We are looking to identify the underlying causes, at both wholesale and retail level, which could be leading to the widespread concerns that have surrounded this market in recent years – including rising energy bills, service quality, profitability and uncertainty over future investment,” said Roger Witcomb, chairman of the Energy Market Investigation Group.
The CMA statement said they’d spotted “four candidate theories of harm” which explain how market characteristics were adversely affecting competition. Shall we break them down?
- Opaque prices and low-level liquidity in wholesale power and gas create barriers to entry in retail and generation.
- Vertically integrated electricity companies harm the competitive position of non-integrated firms to the detriment of customers.
- Market power in electricity generation leads to higher prices.
- “Energy suppliers face weak incentives to compete in retail markets, due in particular to inactive customers, supplier behaviour and/or regulatory interventions.”
So in short, the Big Six aren’t keen on telling us how they come up with their prices, there’s not enough competition to get the prices down, it is too hard for new energy companies to start up and people can’t be bothered to switch suppliers because they’re all rubbish. You knew that. Everyone knew that.
“This is a market which is very complex so it is important at an early stage to focus the investigation on the most relevant issues,” said Witcomb.
The people at Ofgem have done a study which says the 9 million people renting in the UK are losing out to the tune of £200 million. They say renters are less likely to shop around, so they’re getting stiffed on deals.
This data was gathered from Ofgem’s incredibly exciting ’2014 Consumer Engagement survey’ which showed that three-quarters of tenants have never switched supplier and one in five isn’t aware that they are able to.
Dermot Nolan, Ofgem’s CEO, said: “The number of British households renting stands at 9 million and counting, yet research has shown that this group is not shopping around for their energy, and missing out on savings of up to £200.”
Their maths, not ours, just in case any of you lot start moaning.
Weirdly, it seems that there’s a lot of people out there who think they are stuck with the energy supplier who provide their utilities on the day they move in. Even if your landlord takes care of the bills and your rent is all-inclusive, you can still shop around and ask them to go cheaper if you want.
This is all part of Ofgem’s “Be an Energy Shopper” campaign, which hopes to help consumers realise that they aren’t in a situation that is akin to an energy company chaining them to a radiator and waiting for Stockholm Syndrome to kick in.
Ann Robinson, Director of Consumer Policy at uSwitch.com, said: “These findings are worrying, particularly given the dramatic rise in the number of people having to rent as they can’t afford to get onto the property ladder. Renters need all the help they can get to keep costs down and switching energy provider is an extremely easy way to reduce their monthly bills.”
“Ofgem’s campaign to clear up tenants’ misconceptions about their rights is a step in the right direction, but more should be done. We call on landlords and letting agents to provide all new tenants with information on their current energy provider and remind them of their right to switch. This will empower renters to make an informed choice about who provides their energy.”
It seems new billing systems have caused all kinds of problems for customers, but really, there would’ve been complaints either way because, especially in the case of npower, it looks like they’re actively trolling everyone now.
Citizens Advice and Citizens Advice Scotland said complaints about npower rose from 306.8 for every 100,000 customers to 592, in the last quarter of 2013. In fact, complaints about all suppliers increased in the first quarter. They really couldn’t care less could they? They can afford the fines and no-one is looking like they’re going to do anything about it.
Have the Big Six got blackmail files on Cameron and Clegg? Dirty Polaroids and taped conversations with sex-workers or something? That’s the only explanation for their Teflon state of mind.
Last month, Ofgem warned npower to sort out their billing balls-ups by the close of August, or stop all telesales activity. Ofgem are also investigating npower’s failings as a whole, but you get the impression that between the CA and Ofgem, npower will work a way around it.
The chief executive of Citizens Advice, Gillian Guy, said: “The knock-on effect of poor billing systems can turn household budgets upside down. Many people do not have the spare cash to cover the cost of a large bill that suddenly lands on their doorstep.”
“While we recognise npower is receiving more complaints because it is starting to get over some of the earlier issues, it needs to do more to stop consumers’ problems escalating. Offering repayment plans and discussing ways they can help consumers will nip issues in the bud and remove the need to complain.”
“Scottish Power has an opportunity to learn from other suppliers’ billing system failures and address these problems now so more consumers won’t have cause for complaint.”
“A rise in complaints about all suppliers is concerning. Suppliers won’t win the trust of customers back unless they show they understand what consumers need, recognise the financial pressures many people are under and are able to sort out problems quickly. This is something that all suppliers can act on.”
Britain’s infrastructure is looking a bit tatty, so our beloved government have to carry out an independent assessment of the ability of us lot, to see if we can afford to cough-up the extra £250bn which will be added to our household bills modernise the things that give us water and energy.
Above inflation increases means we’re all going to get hammered, especially people on lower incomes.
It will be of zero surprise to anyone with at least one eye and a handful of rudimentary braincells that Britain needs major upgrades to services like energy, water, communications and transport.
The government think that energy bills will rise by 18% by 2030, because obviously, they haven’t gone up enough already.
Margaret Hodge, Labour MP said: “No one seems to be sticking up for the consumer in all this. This is of particular concern given that the poorest households are hit hardest by increases in bills. Poorer households spend more of their incomes on household bills relative to richer households, meaning that funding infrastructure through bills is more regressive than doing so through taxation.”
Hodge’s committee’s report – the excitingly titled ‘Investment: the impact on consumer bills’, Hodge said: “A staggering £375bn of investment is needed to replace the country’s ageing infrastructure, help meet policy commitments such as climate change targets, and meet the long-term needs of a growing population. It is the consumer – through their various bills – that is expected to fund at least two-thirds of this investment where the infrastructure is financed, built, owned and operated by private companies. Currently, consumers rely solely on government and regulators to protect their interests. But it doesn’t take much nous to work out that this is going to have a tough impact on the consumer.”
The short version is this: Wages aren’t going up, but everything else is.
The Treasury countered arguments against them and said: “The country will pay a heavy price if we don’t invest in the infrastructure essential for our future. The National Infrastructure Plan provides unprecedented certainty about what those investments are and making sure they are built in a way that delivers value for consumers and taxpayers is at the centre of it. The analysis in the PAC report fails to make a proper assessment of this.”
You can only assume that the only ‘unprecedented certainty’ in all of this is that those who win the contracts to take on all this work will have a strong connection to the Prime Minister and his pals, because that’s how all the big jobs are divvied out.