April 9, 2012

Ofgem Supports Consumers – The Big Six Better Watch Out!

Filed under: Energy News — Tags: , , — Newsroom @ 12:36 pm

New proposals, which will be outlined tomorrow, will give Ofgem, the energy regulator, additional powers which will enable them to force energy providers to compensate consumers directly if they don’t handle their complaints properly or are guilty of mis-selling their products.  Ofgem will be free to decide on the level of compensation to be paid to customers, as there won’t be a capped maximum figure.  This will bring Ofgem’s powers in line with other regulatory bodies such as Ofcom and the Financial Services Authority.

Under the current system, Ofgem can fine energy suppliers up to ten per cent of their turnover for licence breaches.  However the payments don’t, at the moment, benefit the customers as the fines go directly into the government’s pot.  The proposed changes, if approved, should be a part of the energy bill, to be published later in the year.

During the past few months Ofgem has imposed fines on the energy providers.  In November 2011 they fined npower £2m for the mishandling of customers complaints.  This was some months after Ofgem fined British Gas £2.5m for a similar offence.

EDF Energy has recently decided to pay £4.5m to 70,000 vulnerable customers who will now receive refunds of approximately £50 each.  This was after the Ofgem decision that the energy provider had been guilty of making misleading sales claims.  A statement which was released by Ofgem at the time said the EDF Energy had “offered” to pay the customers.  Under the new proposals Ofgem could impose the repayment, rather than the voluntary stance suggested by the energy provider.

During the past five years Ofgem has been successful in “persuading” the energy providers to make some compensation payments which have exceeded £6m.  Additionally it has imposed £18m in fines.  A statement from Ofgem said “These powers, which we have been seeking from government, would strengthen our ability to take more targeted action against companies that are found in breach of their licence.”

Ed Davey, energy secretary stated “I want to make sure that consumers are protected and that the independent energy regulator has the powers it needs.  We are looking at beefing up Ofgem’s powers further so that should the need arise it can make companies compensate consumers directly, rather than necessarily having to rely on a voluntary approach.”  Ofgem will still be able to impose fines on the energy providers if it is required.

Energy UK which is the trade body which represents the electricity and gas companies has commented “The industry welcomes the opportunity to respond to the consultation and will actively engage with the energy regulator to see how these proposals work in practice.”

It has become obvious during the past few months that trust in the big six energy providers had gradually disappeared with every new price rise, and revelations about mis-selling to customers, together with the poor response from them in relation to complaints.  Perhaps this will redress the balance, so that consumers aren’t constantly fearful about increasing prices and the lack of care offered by the energy providers.

March 28, 2012

Finally – Some Good News Regarding Energy Prices

Filed under: Energy News — Tags: , — Newsroom @ 1:41 pm

The rate of inflation in the UK has reduced to its lowest level in fifteen months, due mainly to the decrease in the price of electricity and gas.  Some of the big six energy providers have started to bring their charges down already which will inevitably force the others to follow suit.

…Followed by Bad News

There is, of course a new problem facing the gas industry.  This is the gas leak from the North Sea Elgin platform, owned by Total, which started on 25th March (2012) and continues, at the present time, unabated.  The platform has, for safety reasons, evacuated all 238 personnel and closed the field down.  Two further fields, Franklin and West Franklin have also ceased production.  The Elgin platform is approximately 150 miles east from Aberdeen.

The leak occurred as a result of a “well operation” and everything is being done to ensure that the impact is minimised as much as possible.  Ongoing investigations are trying to establish the cause and to find the best solution.  There are vessels which are on standby and in the area.  Additionally there are Crisis Management Teams available in Aberdeen and Paris.

A plane has been circling the area surrounding the platforms and has confirmed there is sheen on the surface of the water.  This relates to drilling muds and light condensate, but at the present time the amount is unlikely to cause significant issues to the environment.  Dispersants aren’t considered to be necessary at the moment; however, Oil Spill Response Ltd (OSRL) is aware and is monitoring the position.

Total E&P UK Ltd, which is Total’s UK-based affiliate has co-operated completely with all of the authorities including the Health and Safety Executive (HSE), the Scottish Environmental Protection Agency (SEPA) and the Department of Energy and Climate Change (DECC).

The Total Group has ventures in over 130 countries and is one of the biggest combined gas and oil companies in the world.  It also has a major involvement in the chemical industry and overall has approximately ninety six thousand employees.  The group is involved in every sector of the energy business around the whole of the world.

There is currently an air and sea exclusion zone around the platform which had been pumping nine million cubic metres of gas each day.  That is three per cent of the UK’s natural gas output.  There are two alternative plans under consideration to resolve the leak.  The first entails the drilling of a relief well – this option could take up to six months to achieve.  The other suggestion involves a “platform intervention to kill the well” commented David Hainsworth, who is health, safety and environment manager for Total Exploration and Production UK Ltd.  He continued by stating that “This would be a faster option”.  He said that a decision on tackling the problem would be taken in the next few days.

November 8, 2011

Make the Time and Reduce Costs

Filed under: business energy — Tags: , , , — Newsroom @ 12:25 pm

The final price increase from EDF Energy, one of the big six energy providers is due to come into effect this Thursday, 10th November 2011.  The increases of 15.4% for gas and 4.5% electricity rises are the last increases to be permitted this winter.

Ofgem, the energy regulator, received agreement from all of the six largest energy suppliers – which provides over 99% of electricity and gas for the UK – that there won’t be any further increased charges until at least 1st April 2012.

Small business users are, in particular, struggling with these costs, as their energy bill is, in many cases, their greatest overhead, apart from rent or mortgage payments.  In many cases it is even higher than their business rates.

It is really important for business owners to start taking control of these costs so that they are aware from where the energy is being expended.  It isn’t possible to reduce costs if it isn’t clear where they are coming from!

The hardest thing, as every self-employed person knows, and which applies equally to small business owners, is to actually start a job.  A business owner has many demands on his time, and it is all too easy to prevaricate from doing something which he doesn’t want to do.  There are always ten things which are more important, so that the items which aren’t as interesting are quite easy to put to the bottom of “important things to do today”.

It isn’t particularly exciting or fulfilling to see where savings can be made in the amount of electricity and gas being used – however, it won’t take long and the potential savings are worthwhile.

Self-employed people don’t usually have any staff members at all, so need to deal with everything themselves and know how easy it is to delay doing something.  In the main, though, the problem is that of getting started.  If there is something we are unsure about because it is a little different, we delay and make excuses not to start.  There is always a “reason” for not getting on with the job!

Business owners don’t have much spare time, and to spend it by trying to reduce energy usage may not be a high priority.  However, the time spent is worth cash – cash which could help the business in future.

The business owner who really doesn’t know where to start towards reducing energy costs would be best served by contacting an independent energy broker – they are not tied to any of the energy providers and can therefore access the amount of electricity and gas being used by the business at present, and will work with the business owner to establish where savings can be made, and will negotiate a new contract (obviously, subject to the terms of the existing contract) to ensure that the business owner pays as little as possible for future gas and electricity.

November 1, 2011

You Need To Help Yourself – So That Others May Help You

Filed under: business energy — Tags: , , — Newsroom @ 1:51 pm

There are many small and medium business owners who feel that they are being overcharged by their electricity and gas suppliers.  They are sure that there are problems with their meters.  If the meters are generating incorrect readings for the energy suppliers it will result in a bill for the wrong amount being sent to the company.

Many business owners aren’t aware that they have the right to ask for their meters to be verified to confirm that they are running at the right speed.  Some older meters can spin round or be either too slow or fast.  These problems are more likely to happen for customers who still have the old analogue meters.

It is essential for anyone who believes that their meter is running at an incorrect speed to contact their energy supplier as soon as possible.  Every business is entitled to ask for a check meter to be installed next to their existing meter.  The cost of this, in relation to the possible savings, is low.  It is also considerably cheaper than asking for a replacement meter to be installed.  Once an additional meter is fitted it will be easy to tell, within a very short period of time whether the original meter was faulty.

Energy suppliers are currently involved with the new smart meters and the timetable during which they must have them installed in all business premises. This means that stock of the digital meters which would normally be used to replace the old analogue meters may be depleting.  All energy providers must have the smart meters installed in every small and medium sized business premises by 2019.  Although the official timeframe for these smart meters to be rolled out commences in 2014 some energy providers have already started to install them now in order to keep on top of the situation.

It is important for all businesses to check their energy consumption on a regular basis.  If during one month the amount of energy shown as being used has increased dramatically without there being a valid reason for the increase, there is a good possibility that there is a faulty meter.  Companies must mitigate the effects quickly, thus showing the energy providers the reason why a check meter should be installed.  It may be that the meter has been wrong for some time, but only by a small amount each month which may have been ignored as seasonal fluctuations or extra usage of a specific appliance or machine.

If the company hasn’t ever kept their own records relating to the amount of gas and electricity being consumed each month, it will be difficult for them to realise the increased usage, leading to some considerable time elapsing before it is noticed.

It is essential that every business knows the amount of energy being used each month, particularly if they need to reduce their overheads.

October 31, 2011

Ofgem Rules – OK?

Filed under: business energy — Tags: , , , — Newsroom @ 11:22 am

Whilst we all welcome the intervention of Ofgem, the energy regulator, and the fact that they have told the big six energy suppliers that they are under notice regarding their tariffs and charges, this probably doesn’t go far enough in their pursuit of the suppliers.

There needs to be the opportunity for new players who want to enter the market to be able to throw their hats in without fear of intimidation by the market leaders.  Every industry is better for having competition – this must lead to tighter pricing and better service for their customers.

The net profit for these largest energy providers has, according to Ofgem, increased from £15 in June 2011 to £125 in October 2011.  This means that over a short four month period the annual net profit for the big six suppliers has risen by an enormous 733 per cent.

There can’t be any other industry or business where over such a short period of time the prices would be increased on this scale.  The problem faced by Ofgem though, is that they can’t actually force the energy companies to comply with their requests.  This appears to be self-defeating, having organisations which are there solely to deal with difficult situations, but not having enough authority given to them so that they can insist on compliance, with serious consequences imposed on any individual companies which flout the rules.

The current situation is that the clocks have changed signalling that winter really is on its way, and no doubt the central heating will be working overtime within a few short weeks.  The number of families heading towards the fuel poverty calculation of 10 per cent in net income is rising every day, and no doubt before we reach spring many more thousands of families will add to the current figures.

Many small business owners are in a similar position, and need to spend more of their revenue on energy bills.  The large energy providers have said that they will consider making payment plans for those businesses struggling to pay their accounts, however this doesn’t solve the problem, it just spreads it out!

The best way to save money on gas and electricity is by contacting an individual energy broker who has the expertise to work out where savings can be made.  They can also arrange for an energy audit of premises.  There are energy efficient products and loft and cavity wall insulation and a broker will give suggestions regarding these.  They will be able to negotiate a really good deal with a new company at the end of an existing contract.

One major point to consider is that when helpful information is given, try to act on it – otherwise there won’t be any savings at all!

October 19, 2011

Ask for Help – But Then Use It

Filed under: Business Electricity — Tags: , — Newsroom @ 10:12 am

It is good news that eventually there may be a way ahead which will reduce the charges made by the big six energy suppliers.  At this stage many of the ideas put to the energy providers seem sensible, but how many of these will the energy providers accept and agree to, and how much will consumers actually save?

When it comes down to business customers, there doesn’t appear to be very much assistance, other than providing debt advice, and being able to pay the charges by instalments.

One of the major problems for business owners is that they don’t really want to spend the time in wondering how to save money on their electricity bills.  They want to concentrate on their core business and not to worry about needing to change tariffs, etc.  Although they want to save money – their main interest is in making money for the business.

The best way for business owners to be able to continue with their business, is by letting other people, who may be experts, help you.  It’s “horses for courses” as the saying goes – let everyone do what they are good at!  Inevitably this will lead to areas where there is no expertise.  This is where, by securing the services of an independent energy broker he will identify where and what is being spent.  Your broker will go through all the major energy providers and when your existing contract is due to finish he will negotiate a new contract with the existing company, or if there is a cheaper energy supplier, will arrange the transfer to the new provider.

Utilising the services of an energy broker to obtain the best deal possible is the ideal way forward for many smaller businesses.  The business owner can get on with what he does best – and that is by operating his business to the best of his abilities.  If there is a member of staff who can assist the broker by arranging to implement any energy efficient products suggested by the broker, or, if necessary by making a couple of phone calls or by purchasing low energy light bulbs and thermostats for radiators.  By spending a few pounds now, it can add to the potential savings elsewhere.

Another item which the small business owner needs to do is to read every bill when it arrives.  Many employers and small business users will open a bill, possibly grumble a bit about it, and then puts it away until the reminder arrives.   A few weeks later when he receives a disconnection of services letter, he then panics and pays the bill without looking at it.  No-one should pay an invoice without first checking it closely – there are, in a high proportion of accounts, errors which could result in the bill payer spending far too much on their account.

Take advice, do a little detective work to check whether your bills are correct, and make savings where necessary.

October 12, 2011

Fuel Poverty – Don’t Panic!

Filed under: Energy News — Tags: , , , — Newsroom @ 1:13 pm

Over the past few weeks we have commented about fuel poverty, the big six energy providers and the government’s green deal.

Fuel poverty is recognised when ten per cent or more of household income is spent on gas and electricity.  The current amount of approximately £1300 which is now being spent on household energy bills includes the recent increases.  This figure is about six per cent of median household income.  The problem appears to be further down the line with Deutsche Bank issuing a report which shows that in 2015, after energy suppliers have increased their gas and electric bills to customers by a further 25% a quarter of all family households will be in the fuel poverty trap!

As we in the UK need to rely more on imported fuel, this combined with the increase in wholesale prices has caused higher energy bills.  In the last ten years the average energy bill has increased by approximately 115%!  Given that piece of information, it appears more than likely that over the next 3-4 years there could be further increases totalling some twenty five per cent.  This suggests that the figures from the Deutsche Bank are reasonable.

The government’s alternative green policies appear to be adding to the problem, as the renewables obligation currently adds about ten per cent to our existing energy bills.  This piece of information comes via Ofgem, the energy regulator.  The renewables obligation means that all energy suppliers have to buy a part of the power through the EU’s carbon trading and renewable sources scheme.

By 2020 the government has committed to the spending of £200bn on new infrastructure which includes the expanding of wind power.    Tomorrow, Thursday, 13th October, Chris Huhne the energy minister will is likely to confirm the government’s plan to build new nuclear power stations.

If plans to include a carbon floor price in 2013 which make gas-fired and coal power station more expensive to run get the go ahead, then this too will increase our energy bills.

Should the government decide to cancel their green initiatives, then this could save fifteen per cent of our 2015 energy bills although this seems very unlikely given all the efforts which have been expended to date.

Whenever new technology becomes available it is obvious that to implement it will cost a considerable amount of cash.  The government won’t have suddenly have taken the decision to go down this route.  It will have taken a huge amount of deliberation and consultation with industry experts before anything makes any progress towards taking a decision.  Committee after committee will have debated the merits or otherwise and this all takes time.

The figures being given to us today about increases in our energy bills may have changed again before we are very much older.  Wherever possible, reduce your personal consumption of gas and electricity – beyond that you can’t do any more.   If you are experiencing difficulties in keeping control of you energy bills – ask for help.

There isn’t any point in worrying about something over which we have no control!  Ask for help, and continue with your requests until you receive a satisfactory response.

October 7, 2011

The Way Ahead – Possibly, Who Knows?

Filed under: business energy — Tags: , — Newsroom @ 9:24 am

The three main political parties have all had their conferences and increased energy prices have been on the agenda.  One of the main news items this week has been regarding electricity and gas bills and the consumers’ concerns over the cost of energy for the coming winter.

It has been the policy of the major energy providers not to be over zealous in their actions during October to March and particularly where there are young children and elderly or vulnerable people residing.  Additionally the energy suppliers also have to work with people in these sectors to ensure everything possible is being done to prevent the power from being switched off at any time of the year.

To a certain extent this is commendable – however the situation of perpetually increasing energy costs hasn’t been resolved.   If the cost of energy is more than people can afford, and assuming that they have made the effort to economise where it is practical to do so, then what happens?

Many people have swapped from paying energy either by monthly or quarterly to having card meters so that they are in charge of their own energy costs.   This is a really responsible way to deal with the situation – it doesn’t resolve it though, and this is quite worrying.  People with meters pay for their energy in advance once the amount showing on the meter is very low.  What happens if they can’t afford to put another £10 onto the card?

These people, who may be our neighbours or friends, need protection from the gas and electricity being cut off, or they can find that they are in a position of not being able to top-up their meter, so that they still don’t have access to heating and hot water during the winter months.  The very people who can’t go out or exercise to keep warm, or don’t work in a warm office have the age old problem of not being able to pay for their electricity and gas.

Perhaps there needs to be a system in place which – although complicated to manage – means that no more than a specific percentage of net income in a household where the residents are in one of these groups is allocated to the costs of energy.  Anything more than that amount is wiped off.  Obviously this is only a suggestion and the variables regarding income and expenditure for every qualifying person/household will be a nightmare to supervise.

Whatever proposals there are for dealing with this problem, which will only continue to grow, particularly with an aging population, it won’t be a “one size fits all” and there may need to be a combination of different schemes in order to ensure that no-one is left out of the loop.

The energy suppliers will need to play their part, along with the government, and the benefits agencies and it will probably take some considerable time to administer fairly.  Whatever the position, though, something needs to be better than the current position.

October 3, 2011

Small Changes – Big Savings

Filed under: Energy Efficiency — Tags: , , — Newsroom @ 2:22 pm

The big six gas and electricity suppliers appear to be in the news every day.  Ofgem, together with the accountants appointed by them, are considering whether the actions of these energy providers are reasonable.

Smart meters are starting to be rolled out throughout to customers throughout the UK and the energy companies have been asked to confirm that they will not use the installation as a vehicle for trying to persuade customers to change suppliers.  Until very recently all the big six companies had been “door stepping” as a method of persuasion.  “Door stepping” is when a salesperson calls at a residence, without an appointment, and tries to convince the home owner or tenant, to change energy providers to their company.  Unfortunately, some of the methods used by these sales people haven’t been appropriate, and in some cases home owners were told complete untruths in order to gain their business.

Now that these smart meters are being installed they will help the small business or home owner to know how much they spend on their energy, and the cost of using appliances.  Where there is a small household with one or two people living at a property it is easy to use the washing machine unnecessarily.  Everyone is aware that overfilling a washing machine causes problems by the machine needing to work harder to move the clothing around.  The water necessary to assist this may take additional time to heat to the correct temperature.

When there is only a small household however, the opposite tends to happen, and it is all too easy to decide to wash the few items which are in the machine.  This usually stems back to when the children lived at home, and it was necessary to use the machine every one or two days.  It became a habit which just continues even though it isn’t now needed.   A small household will probably only require the use of a washing machine, twice in one week – once for items of clothing, and the second time is for bed linen; obviously there will be exceptions.

Another expensive appliance is the oven which can take up to fifteen minutes to get to the correct temperature.   It is always better to cook several items at the same time, and if it is possible to cook more of one dish than is used for one meal that is even better.  In other words, batch cook, for most of the meals for the week, and if cooking casseroles or stews, make enough for two or three meals, and then freeze them when cold.  It doesn’t cost any extra money to fill the oven to capacity so it is well worth cooking as many items as possible.  Freezing extra meals is also useful for when there are busy days with little time to make meals.

There are many other ways in which by a little adjustment in the way we normally carry out these chores can result in substantial savings on the energy bill.  The sooner we all start to adapt to change, the more money can be saved.

September 27, 2011

Make a Little Effort – Your Wallet will Benefit

Filed under: business energy — Tags: , , , — Newsroom @ 10:22 am

We have suggested for some considerable time that there needs to be a significant reduction in the amount of gas and electricity consumed by everyone in the UK.  From huge corporations down to the smallest one person business, 5 star hotels to studio apartments; we all need to play our part.

Over the past few weeks leading up to the conference season the various political parties have been adding their twopenneth into the melting pots.   Beneath all of the hype and bluster which automatically is achieved when politicians are involved, they all agree that energy savings are necessary.

It is irrelevant as to where the blame lies – yes, the energy suppliers have increased their charges quite dramatically and we’ve all given them plenty of stick about it.  Ofgem and their independent accounting experts are trying to get to the bottom of these price increases and when answers are available I’m sure we will all be advised.

The much-promised “green deal” which will soon be available, will hopefully encourage a large proportion of the UK population to improve their own energy efficiency.   Businesses throughout the country will also be able to benefit from the same funding.  Information on how business and residential customers will benefit has now become available and tomorrow I will advise as to the way the coalition government expect the scheme to work.

Energy brokers have a big part to play in explaining to small and medium sized business owners and directors the best way forward.  These brokers will be able to provide an energy audit of the business premises which will identify where the energy is being used.  Once that information is available then these business owners will be able to work with the energy brokers to obtain the highest savings.

There is a need for change and surely everyone who lives and works in the UK will know that the gas and electricity currently being consumed is depleting rapidly and at some point in the not too distant future will run out.   Alternatives are obviously being implemented to ensure that there will be sufficient energy for the long term.

It is still up to all of us to consider the way in which we use electricity and gas.  In rural areas there are places where mains gas isn’t available – there are alternative delivery systems for LPG by tank outside the property or by bottles.  With a little thought from the whole population perhaps a ten per cent saving on energy consumption could be achieved without needing to spend much to promote it.  Check your energy bill and see how much electricity and gas you used in the last quarter or month – make a note of the units you used and then deduct ten per cent from the total units.  That is the figure to aim for this month.  Check the meter regularly to confirm that you are on target, and adjust your consumption accordingly.  With only a little effort the energy used can be reduced, and of course, on the flip side, the more the savings are on energy, the more money is left in our bank account.

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