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E.ON Fined £12 Million by Ofgem For Misselling

16 May 2014

E.ON has today agreed to pay £12m to vulnerable customers, after Ofgem’s investigation found it had broken energy sales rules. E.ON has also committed to compensating any customer that it missold to, including automatic payments to some vulnerable customers.

The agreed redress package reflects the harm caused by E.ON’s extensive poor sales practices carried out between June 2010 and December 2013. Given the large number of contracts signed in this period it is likely a large number of customers were missold to by E.ON and Ofgem took this into account when agreeing the redress package. Ofgem’s investigation found no evidence that E.ON’s senior management set out to deliberately missell to customers, but did find that management did not do enough to identify issues or act on problems when discovered.

Ofgem’s investigation found that E.ON failed to properly train and monitor both its own staff and those it employed through third party telesales agencies, leading to incorrect information being provided to customers on the doorstep and over the phone, which could have misled customers. The investigation also showed failures in E.ON’s management arrangements meant that insufficient attention was paid to ensuring compliance with energy sales rules. E.ON has acknowledged these failings, made considerable changes and improvements to its processes, including ceasing to use the third party agencies involved, and shown good cooperation throughout the investigation. Had this not been the case the penalty would have been higher.

Sarah Harrison, Senior Partner in charge of enforcement said: “Since 2010 Ofgem has imposed nearly £100m in fines and redress on energy companies for various rule breaches, including £39m for misselling, and introduced radical new reforms to make the market simpler, clearer and fairer for consumers. The time is right to draw a line under past supplier bad behaviour and truly rebuild trust so consumers are put at the heart of the energy market. E.ON has today taken a good step by accepting responsibility for its actions and putting proper redress in place.”

As part of this package E.ON has agreed to pay around £35 to 333,000 of their customers who are normally recipients of the Warm Home Discount. This redress package will benefit pensioners, disabled and low income families. Additionally, make automatic payments to some vulnerable customers who may have been affected by E.ON’s poor sales practices.

Story appears courtesy of Ofgem.


National Grid’s Executive Director Nick Winser to Step Down

15 May 2014

National Grid today announces that Nick Winser, Executive Director UK, will step down from the Board after the 2014 Annual General Meeting in July.

Nick will continue with his roles as President of the European Network of Transmission System Operators for Electricity (ENTSO-E) and as chairman of National Grid Electricity Transmission Plc and National Grid Gas Plc, the two principal regulated operating subsidiaries of National Grid in the UK, through to July 2015 before retiring from the Company. In respect of these responsibilities, he will continue to report to Steve Holliday, Chief Executive of National Grid. Nick joined the Central Electricity Generating Board in 1983, becoming National Grid’s Director of Engineering in 2001. He was appointed to the Board in April 2003.

Steve Holliday, Chief Executive, said: “Nick has made an invaluable contribution to the successful development of National Grid in both the UK and US. In recent years he has played a key role in designing and negotiating the recent UK RIIO price controls which should provide enduring value for UK consumers and National Grid shareholders alike through the innovative framework around sharing efficiencies and cost reductions. I am delighted he will continue to contribute to our regulated businesses in the UK and to the broader European industry.”

Sir Peter Gershon, Chairman, added: “Nick has played an important role on the Board of National Grid, particularly through the key decisions around

negotiating and accepting the RIIO price controls in 2012. I would like to thank him for his significant contribution to the Board over the last eleven years.”

Story appears courtesy of National Grid



Ofgem Announces 2014 Innovation Competitions’ Shortlist

14 May 2014

Ofgem has shortlisted 11 projects which have passed the Initial Screening Process (ISP) for this year’s Innovation Competitions.

Innovation funding is available to network companies through the Electricity Network Innovation Competition (Electricity NIC), the Gas NIC and the Low Carbon Networks (LCN) Fund. These competitions provide essential backing to innovative projects which aim to make the energy networks smarter, accelerate the development of a low carbon energy sector as well as deliver environmental benefits and lower future costs to consumers.

The projects that have passed the ISP are now eligible to progress to the full submission stage. Network companies must submit their fully developed proposals to Ofgem by 25 July 2014. An expert panel will evaluate the full submission proposals against detailed criteria and make a recommendation to Ofgem on which projects should receive funding. Ofgem will decide which projects to fund by the end of November 2014

Story appears courtesy of Ofgem.


One in Five Customers Say Their Water Charges Are Not Affordable

09 May 2014

A growing number of households in England and Wales are struggling to afford their water bill, according to research carried out on behalf of the Consumer Council for Water (CCWater).

One in five customers say their water bill is not affordable, as many households continue to battle with cost of living pressures, CCWater’s ‘Water Matters 2013’ survey has revealed. This is an increase from one in eight customers last year.

It also reveals that fewer than six out of ten water customers consider their water and sewerage charges to be fair.

The research highlights why CCWater, together with local challenge groups, has been pressing water companies to put forward price and investment plans for 2015 to 2020 which reflect what their customers want and at a price they think is acceptable.

A final decision on what all water companies can charge over the next five years will be made by Ofwat in December, but there are already positive signs most companies have listened to their customers.

Tony Smith, chief executive of CCWater, said: “Our research shows why our challenge to water companies to deliver proposals for the next five years that are affordable and acceptable to customers is so crucial. Many water companies have listened and are on track to deliver plans for the future which should begin to address these concerns. Others still have more work to do if they are to turn the tide of customers’ views on affordable bills and satisfaction with value for money.”

Water companies are still struggling to bridge the gap between customers’ increased levels of satisfaction with the water and sewerage services they receive, compared to their much lower satisfaction with value for money.

Ninety three per cent of water customers said they were satisfied with their water supply, and 87 per cent with sewerage services, but only about 70 per cent were satisfied with value for money. However some companies are showing signs of improvement on value for money and CCWater will be looking for this to become an established trend in future years.

Customers can use CCWater’s survey results to compare the performance of their own water company over the past three years and with other companies across England and Wales.

And those customers who are struggling to pay their water bill should contact their water company who can usually offer them support with their payments.

Story appears courtesy of Consumer Council for Water.

Centrica and QPI Strengthen Strategic Relationship in North America

08 May 2014

Centrica plc and Qatar Petroleum International (“QPI”), the international arm and wholly owned subsidiary of Qatar Petroleum (“QP”), have reached an agreement whereby QPI will acquire 40 per cent of Centrica’s Canadian natural gas business for C$200million (£107million).

The assets will be placed into Centrica and QPI’s existing 60:40 venture, the CQ Energy Canada Partnership, and will sit alongside assets that were jointly acquired from Suncor Energy, announced in April 2013.

This transaction is the second under the Memorandum of Understanding (MoU) signed between the two parties in December 2011, and fully aligns Centrica and QPI’s interests in the Western Canadian Sedimentary Basin (WCSB).

The signing took place under the patronage of His Excellency Dr. Mohammed Bin Saleh Al Sada, Minister of Energy and Industry and Chairman of the Board of QPI, who welcomed the agreement as an important development in the partnership between Centrica and QPI.

Sam Laidlaw, Chief Executive of Centrica, said: “I am delighted that we are further strengthening the relationship between Centrica and QPI. We look forward to continuing to work together as we consider investment opportunities in gas and power on both sides of the Atlantic.”

Nasser Al-Jaidah, Chief Executive Officer of QPI, said: “We are pleased to have expanded our strategic alliance with our partner Centrica through this acquisition. This agreement demonstrates QPI’s strong commitment to further our existing global partnerships and forge new opportunities where possible.”

Governance of the CQ Energy Canada Partnership joint venture will remain unchanged, with Centrica continuing to act as operator of the assets on behalf of the CQ Energy Canada Partnership.

Story appears courtesy of Centrica

Mayor to Become London’s Smallest Electricity Supplier

08 May 2014

The Mayor, Boris Johnson, has taken the next step to becoming London’s smallest electricity supplier, allowing him to buy power from small generators at a better rate and sell it on to other public bodies, boosting the low carbon economy, and helping to secure London’s future energy supply.

London will be the first public authority in the country to receive a brand new type of ‘junior’ electricity licence, and the Mayor expects to be buying and selling power by early 2015. The ground-breaking move will permit him to offer the capital’s small electricity producers up to 30 per cent more for their excess energy than existing suppliers do, which he will then sell on to TfL, the Met and others at cost price.

The Mayor has now invited the electricity market to come forward with proposals to provide the additional services he needs to begin supply to as a ‘junior’ licensee. This includes the management and maintenance of the large scale systems involved in supplying electricity in London, and follows the Mayor’s initial application for the new licence in March 2013.

Improving the viability of local energy projects is expected to help unlock more than £300 million worth of investment for 22 new heat and power projects already in the pipeline. In the longer term, it could help generate over £8 billion of investment and around 850 jobs a year until 2025.

The Mayor will initially buy from generators owned by London’s boroughs and public bodies. He will sell it on, at cost price, to other public sector organisations, such as Transport for London and the Met Police and if the scheme proves successful, plans to extend it to include private sector energy producers in London as well.

Twelve boroughs and waste authorities already have schemes which could benefit. Together they are capable of generating around 76 megawatts of electricity – that’s equivalent to the power used by about 76,000 homes. These types of schemes primarily heat local buildings through the electricity generating process. For example, Islington’s Bunhill Heat and Power project uses a gas engine as well as heat from the tube to warm
hundreds of homes and local swimming baths. Westminster’s Pimlico District Heating Undertaking heats thousands of homes, commercial premises
and three schools through two gas engines.

The Mayor of London, Boris Johnson, said: “Nurturing a new crop of small, low carbon energy producers across the capital is the key to a more secure, cost-effective and sustainable energy supply for us all. Investing in locally sourced power will help keep Londoners’ fuel bills down and drive innovation, jobs and growth in this city’s burgeoning low carbon sector.”

The Mayor, who has a target to produce 25 per cent of London’s energy from local sources by 2025, has taken a leading role in taking this new system of licensing forward and has been working with Ofgem and the Department of Energy and Climate Change since 2011 to develop it.

Secretary of State for Energy and Climate Change Ed Davey said; “This is a significant development and I welcome that London will be the first public authority in the country to become a small electricity supplier. Opening up our energy market to smaller companies is good news for competition and therefore good news for consumers. This is part of my vision to help to meet the UK’s energy and climate change challenges,
supporting a sustainable and secure energy system; reducing UK greenhouse gas emissions; and lowering consumer bills.”

The response of the larger, full licensees, to the current tendering process will be an indication of how willing they are to support new entrants and the creation of a wider, more diverse electricity market.

Story appears courtesy of  london.gov.uk

Electricity Switching is Still on the Rise

07 May 2014

The April electricity switching figures show that the number of people changing electricity supplier is still increasing. April was the third
month in a row when the total number of switches increased, hitting a total of 289,000. The number of people switching to small suppliers reached an all-time high of 135,000 this is a record 46.88%.

Energy UK said:
“Once again, the monthly electricity switching report has shown that switching is on the up. Hundreds of thousands of customers are taking advantage of the choice on offer and finding the best deal for them. The Cornwall report on competition in the energy markets showed how high competition is in the sector. This month’s switching report shows how many people are making use of it. This is the sixth month in a row that the percentage of all switching being a move to small supplier has increased. This shows that there is plenty of choice out there and the public are making the most of it.”

Story appears courtesy of Energy UK

Welsh Water Pledges to Lower Bills Further

06 Apr 2014

Dŵr Cymru Welsh Water has submitted a revised Business Plan (2015-2020) to the industry regulator, Ofwat, which proposes a 6% reduction before inflation in its average household water and sewerage bills by 2020 whilst maintaining record investment at £1.5 billion.

The average household bill will fall by £26 compared to current prices and will result in a decade of below-inflation increases by 2020. As part of the five year price review process (2015-2020), Dŵr Cymru submitted a Business Plan to Ofwat in December 2013 that outlined a £1.5 billion investment plan to maintain and improve its services. The Plan was endorsed by 94% of customers as part of the company’s largest ever consultation and research programme that helped inform the proposals.

In January 2014, Ofwat provided further guidance to water companies on what should be included in their Business Plans whilst Welsh Water also continued to consult its customers.

Chris Jones, Dŵr Cymru Welsh Water Chief Executive, said: “This Business Plan will drive improvements to the services we provide to our customers, maintain high levels of investment, offer even better value for money and a lower water bill.

“Despite cutting bills further, we’ve not cut investment or lost any of the benefits of our original plan. As a company without shareholders, our unique model in the utility industry ensures that all gains go to customers and the reduction in the bill has been achieved through some changes to the way in which we finance the Plan, including a lower cost of capital.

“Our Plan will improve services for today’s customers and future generations; maintain our strong financial base; provide a lower bill for customers; and help us achieve our long-term goals.”

Story appears courtesy of Dŵr Cymru Welsh Water.

Ofwat Publishes Draft Determinations for South West Water and Affinity Water

30 Apr 2014

Ofwat today published draft determinations for South West Water and Affinity Water as part of the 2014 price review. The draft determinations set out the proposed prices the companies can charge their customers for water and sewage services in 2015-2020 and show a reduction in customer bills before inflation.

On 4 April 2014, South West Water and Affinity Water were awarded enhanced status after the completion of the risk-based review which assessed the quality of business plans companies submitted for the 2014 price review. These companies therefore receive draft determinations earlier than other companies.

South West and Affinity both propose lower customer bills in real terms over the next price control period 2015-2020 while maintaining investment in customer services and the environment. South West’s customers’ bills will fall an average of 7% before inflation, while the company will spend approximately £1.7bn on maintaining and improving service to customers. Affinity’s customers’ bills will fall an average of 11% before inflation, with investment of approximately £1.2bn over the period.

Ofwat’s Chief Executive, Cathryn Ross, said:

“It is our duty to protect customers’ interests and ensure that companies focus on delivering the best service to their customers at a fair price. This is essential if the sector is to retain public confidence and trust. I’m pleased to see that both South West Water and Affinity Water have proposed lower bills for their customers while maintaining essential investment for the future.”

Ofwat’s Chief Regulation Officer, Sonia Brown, said:

“We wanted to see companies really stretch themselves, and South West and Affinity rose to that challenge with innovative and affordable business plans. This is a good deal for customers, reflecting the engagement companies had with their customers and the work of Customer Challenge Groups which played an important role in delivering these high-quality plans.”

Consultation on the draft determinations will close on 4 June, and representations from all stakeholders are welcome. Other companies will receive their draft determinations in either June or August. Ofwat is currently considering requests from companies to receive June draft determinations which will be published on 25 June.

Story appears courtesy of Ofwat

London’s First Commercial Anaerobic Digestion Plant Opens

29 Apr 2014

The UK Green Investment Bank (GIB) has announced that the first project that it invested in, via its Foresight-managed fund, has been completed on time, within budget and is generating power. The TEG Biogas plant in Dagenham was officially opened on 23rd April, by Secretary of State for Business, Innovation and Skills, Vince Cable MP.

The plant is London’s first commercial-scale anaerobic digestion and composting facility. It has been constructed, and is being operated and managed, by TEG Group plc, the AIM listed green technology company which develops and operates organic composting and energy plants. The TEG Group is now providing on-going operating and maintenance services to TEG Biogas under a 15 year contract.

Situated on a 4.7 acre site owned by the Mayor of London and within his 60 acre London Sustainable Industries Park (LSIP) in Dagenham, the plant has the capacity to process up to 50,000 tonnes, per annum, of food and green waste. Much of the waste, which could have otherwise gone to landfill, will come from households and businesses across London.

It will produce 1.4MW of renewable electricity each year, which is being sold to the National Grid. It will also produce 14,000 tonnes of compost and 36,000 tonnes of digestate each year, for agricultural use.

Residual heat produced by the plant will amount to 1.15MW and will be used by the plant’s nearest neighbour Closed Loop Recycling, the world’s first food grade PET and HDPE plastic bottle recycling plant.

GIB’s first investment, via its Foresight-managed fund UK Waste Resources and Energy Investments (UKWREI) fund, was announced in late 2012. Foresight played a pivotal role in the transaction, providing capital from two of its managed funds and structuring the deal.

The UKWREI fund, in which GIB is the cornerstone investor, made a £2m equity investment in the project, while Foresight Environmental Fund (FEF) led the project with a £9m equity investment. FEF is a £60m fund targeting waste infrastructure projects within Greater London, cornerstoned by the European Investment Bank and the London Waste and Recycling Board (LWARB) through the London Green Fund (LGF) alongside several institutional and private investors. The remaining £2m of equity was provided by private sector investors. Senior debt of £7.9m was provided by Investec Bank plc and LWARB.

Shaun Kingsbury, Chief Executive, UK Green Investment Bank, said:
“This project is an important first for London and provides a positive demonstration of a fully integrated renewable energy and waste management project. The anaerobic digestion and composting facility will see waste, which could have been sent to landfill, now being used to create renewable energy and heat as well as compost and digestate for the agriculture sector.
“I congratulate Foresight and TEG on bringing in the project on time and within budget.”

Secretary of State for Business, Innovation and Skills, Vince Cable MP, said:
“This plant provides a cutting edge, environmentally friendly way to manage London’s waste and generate power. That is why it is so pleasing this was the very first investment made by the Green Investment Bank back in 2012.”

The Mayor of London, Boris Johnson said:

“I welcome the opening of this fantastic new project. It is great news for the local area and it shows that the London Sustainable Industries Park can deliver low carbon energy, jobs, innovation and growth for London.”

Mick Fishwick, CEO of TEG Group plc commented:

“I am delighted to see the Dagenham plant completed on time and on budget and that it has now been passed across to its owners. This project once again demonstrates TEG’s ability to take a plant from the drawing board to full commercial production and we look forward to operating and maintaining the plant for the coming 15 years, while we continue to develop and build further UK based IVC and AD plants”.

Nigel Aitchison, Partner and Head of Environmental at Foresight Group added:

“We are delighted to see the plant commissioned, which will see 50,000 tonnes of organic waste matter from Greater London diverted from landfill every year and in addition to producing over 2.5 MW of renewable energy. We see the TEG plant as a model for what can be achieved in sustainable infrastructure which allows waste management to be transformed into resource management. We look forward to making announcements of further investments, which will drive both growth and job creation in this important sector in Greater London and across the UK in the very near future.”

The Mayor’s London Sustainable Industries Park has been designed to create a cluster of environmentally focused enterprises such as low-carbon energy from waste plants, innovative waste facilities and other CleanTech infrastructure (such as recycling, renewable energy, wind power, solar power, biomass).

The TEG Group joins Closed Loop, an expanding plastic recycling business, on the Park, with two further sustainable energy from waste businesses due on site in the next 12 months. The Institute for Sustainability will launch their Cradle to Cradle demonstrator and ‘Living Lab’ – exploring residential sustainability approaches and energy and water efficiency innovations – alongside the Mayor’s Climate Energy Homes designed Hub/ Security building at the Park over the summer.

Story appears courtesy of Green Investment Bank