Weekend press round-up: Suppliers stop clawing back debts via PPMs

In our latest round-up of the weekend press, suppliers stop clawing back debts from customers on prepayment meters, an energy boss warns high energy bills are here to stay and Anglian Water is fined £500,000 after sewage discharges led to the death of thousands of fish.

UK energy suppliers stop clawing back debts via prepayment meters

Leading energy suppliers have stopped reclaiming debts from some prepayment meter customers amid calls for an industry moratorium on clawing back money owed through the devices.

The Guardian understands that ScottishPower, which has nearly five million customers, has stopped recovering outstanding debts from people who have been moved on to prepayment meters in recent weeks.

Energy suppliers often put customers on to prepayment meters as part of a plan to prevent them from amassing large debts. Customers then pay for their usage and standing charges as well as funds towards paying off their debts.

However, some suppliers have temporarily stopped chasing these debts amid concerns over the impact of the cost of living crisis.

MPs joined charities and consumer groups in calling for an immediate ban on the use of court warrants after Guardian reported estimates from Citizens Advice that 600,000 people were forced to switch from credit meters once they had run up debt with their energy supplier in 2022, compared with 380,000 in 2021.

The charity raised concerns over the treatment of vulnerable people after it found that millions of Britons were regularly going without heat or power last year amid fears over sky-high bills.

The energy suppliers Ovo and E.ON promised last month to stop all debt recovery on prepayment meters until at least March. Ovo, Utilita and Shell paused forced installations by warrant over Christmas. ScottishPower has stopped the practice since December.

Campaigners have now called on more energy suppliers to follow suit. A report on the use of prepayment meters by the thinktank Humane Energy, seen by the Guardian, demands an immediate ban on “clawbacks” of energy debt until the end of March and during subsequent winters. It suggests a limit of £1 a week should be recoverable during the intervening periods.

The campaigning thinktank also calls for all customers on prepayment meters to be classed as vulnerable until they have been assessed otherwise through communications with their energy supplier and that process is overseen by regulator Ofgem.

The role of magistrates has been questioned after it emerged that a handful of courts around the country are signing off thousands of entry warrants each month, allowing suppliers access to force people on to prepayment meters.

The Guardian

Energy boss warns higher bills are here to stay

The boss of Norwegian energy giant Equinor has said he does not expect gas and electricity bills to return to the levels they were before Covid.

Anders Opedal told the BBC the transition from fossil fuels towards less damaging sources of energy meant costs would remain high.

Mr Opedal also said that windfall taxes on energy firms were affecting investment in projects in the UK.

Energy companies have reported record profits because of higher gas prices.

Equinor, which makes most of its money producing oil and gas, is one of Europe’s biggest energy companies, with operations in 36 countries around the world including the UK.

In its most recent financial results, it reported pre-tax profits of $24.3bn (£19.8bn) between July and September compared to $9.7bn in the same period the year before.

Wholesale prices rose as Covid restrictions began to ease but soared higher after Russia invaded Ukraine and countries targeted the Kremlin with sanctions.

In recent weeks, in part due to warmer than usual weather across Europe, gas prices have returned to where they were before the Russian invasion of Ukraine.

However, gas and electricity bills for households and businesses remain elevated and are squeezing living costs for many.

Mr Opedal said it was doubtful that gas and electricity bills would return to a time when the typical UK household was paying around £1,300 a year. The typical annual bill for homes is currently around £2,500 which includes help from the UK government.

Mr Opedal said there is “a kind of re-wiring of the whole energy system in Europe particularly after the gas from Russia was taken away”. He said huge investment in renewables was needed, including using more hydrogen for example.

“This will require a lot of investment and these investments need to be paid for, so I would assume that the energy bills may slightly be higher than in the past but not as volatile and high as we have today,” Mr Opedal said.

Looking ahead, he said “we need to treat energy as something that is not abundant”.

“I think we have had a lot of cheaper energy in the past and we probably wasted some of it, so we need to make sure we’re making the right investments now [and] everyone [should] use as little energy as possible.”

Mr Opedal spoke to the BBC before attending the World Economic Forum in Davos, Switzerland which is an annual gathering of political and business leaders. The theme of this year’s meeting, which takes place from 16-20 January, is “Cooperation in a fragmented world”.

Mr Opedal took over as chief executive and president of Equinor in November 2020 with a pledge to be “a force” in the shift to green energy. He started his career as a petroleum engineer.

Last year, the UK introduced a windfall tax on energy companies that have benefitted from the spike in prices.

Initially 25%, the so-called Energy Profits Levy will rise to 35% in January and remain in place until March 2028.

The tax applies to profits made from extracting UK oil and gas, but not from other activities such as refining oil and selling petrol and diesel on forecourts.

The scheme also lets firms claim tax savings worth 91p of every £1 invested in fossil fuel extraction in the UK.

Mr Opedal said that while the tax had not impacted Equinor’s investment strategy in the UK: “It is affecting how we judge each project because we have to take into account what is the tax level compared to what are all the other risks.”

BBC News

Put all of National Grid under state control, net zero campaigners urge

National Grid, which maintains the backbone of Britain’s electricity network, should be taken under government control to ensure the rapid transition to net zero, campaigners said, after a report revealed that the business paid investors almost £9bn in dividends and share buyback schemes over the last five years.

The stock-market-listed firm, which counts the fund managers BlackRock, Vanguard and the Abu Dhabi Investment Authority among its top five shareholders, has a 19% operating margin on its electricity business, allowing the board to fund an average £1bn a year in dividends.

A report by the left-of-centre thinktank Common Wealth found that a special dividend following the sale of its gas distribution business gave a significant boost to shareholders in 2017 when the funds might have been used for further investment.

The business increased the amount paid to shareholders to £4.5bn following a £3.2bn special dividend.

Part of National Grid is on course to be nationalised next year to allow the government more control over its strategy, but the Green party said the entire organisation needed to be nationalised to ensure that all the resources available were used to reduce carbon emissions.

Unite, Britain’s largest union, said National Grid was a “state-sponsored cash machine” and that ministers should take control of the company and the 14 privately owned distribution network operators (DNOs), each responsible for a different area of the country.

Renewables businesses have complained that the DNOs and National Grid resist extending the network to bring low-carbon generation on stream to protect their profit margins.

Molly Scott Cato, the Green party’s finance and economy spokesperson, said: “To achieve our climate targets, it is vital that we shift to powering our lives through electricity, and the National Grid plays a vital role in this endeavour.”

She said that by the end of last year, almost 700 renewable energy projects were on hold, waiting for the National Grid to find them capacity. “When it comes to ensuring a rapid transition to renewables, ownership really matters. We need National Grid to be able to focus solely on ensuring we have a sustainable future, not being distracted by keeping shareholders sweet.”

Unite’s general secretary, Sharon Graham, said National Grid and the 14 DNOs moved slowly to protect shareholder interests. “Electricity and gas networks such as National Grid are effectively state-licensed cash machines.”

She said the union’s research showed that the transmission and distribution monopolies made a combined £6.3bn in 2021, up from £5.6bn in 2019. “Unite’s analysis found that at least 30% of the increase in the energy price cap over the last year was made up of profit for companies across the energy supply chain, with networks like National Grid among the biggest winners.”

The Hong Kong billionaire Li Ka-shing’s CK Group was awarded £2bn in dividends over the last 5 years from its holdings in the DNO’s UK Power Networks, Northern Gas Networks, Wales and West Utilities.

National Grid, which has half its business in the US, said it was planning to spend almost £30bn upgrading the UK’s transmission systems over the next four years, making it the largest single investment in low-carbon technologies in Britain.

A company spokesperson said: “National Grid is a global business with assets split 50/50 between the UK and US. We are proud to be one of the largest FTSE investors in the transition to net zero, committing £29bn of green capex between 2022 and 2026 to fund the infrastructure that will deliver a clean, fair and affordable energy future.”

The Guardian

Water company fined after raw sewage killed 5,000 fish

A water company has been fined more than £500,000 after it failed to stop raw sewage being discharged into a river for nearly 24 hours, killing 5,000 fish.

Around six million litres of raw sewage – the equivalent of more than two Olympic swimming pools – was discharged into the River Great Ouse at Brackley, Northamptonshire, because of a malfunction of Anglian Water systems.

Electrical faults caused pumps to stop just before 6pm on 24 May 2017, causing the discharge from an emergency overflow at a pumping station.

But a failure of the early warning alarm system, which should have alerted staff to a problem, meant it went unnoticed.

The discharge was not stopped until around 5pm the next day – 23 hours later.

Fish including brown trout, chub and pike were killed, as well as smaller species such as bullhead, dace, stone loach, minnow, gudgeon and 79 brook lampreys. Dead signal crayfish were also spotted.

A dog walker saw up to 30 dying fish being carried by the river flow, gasping for breath belly-up or tail-up.

She also reported seeing a large trout following the riverbank, jumping out of the water and rubbing itself along the bank.

The pollution was found to have stretched nearly 7.5 miles down river.

Anglian Water admitted a breach of permit and was ordered to pay a fine of £510,000, costs of £50,000 and a victim surcharge of £170 at Peterborough magistrates’ court.

Investigating Environment Agency officers reported finding the bed of a watercourse that flows into the river was completely covered in sewage debris, including panty liners and tampons.

Brackley terminal pumping station pumps sewage from the town of Brackley to be treated at sewage works nearly a mile away.

Sir James Bevan, chief executive of the Environment Agency, said: “We welcome this sentence. Serious pollution is a serious crime.

“The Environment Agency will pursue any water company that fails to uphold the law or protect nature, and will continue to press for the strongest possible penalties for those which do not.”

An Anglian Water spokesperson said: “We work tirelessly to protect and enhance the environment, and find it deeply distressing when incidents like this occur.

“We know there’s no room for complacency, and we’re absolutely determined to improve further and progress towards achieving our zero pollutions goal.”

The Independent

Three times as many heat pump engineers needed to hit targets, industry warns

National targets for replacing gas boilers in the push to net zero are based on unrealistic assumptions about the number of installers required, a trade group has warned.

The Energy and Utilities Alliance (EUA) estimates almost three times as many installers than planned for will be required if the Government is to meet its targets for rolling out electric heat pumps.

Mike Foster, chief executive of the EUA, says underestimating the number of workers “deals a hammer blow” to the heat pump rollout ambitions.

He added: “The world and his dog know it takes considerably longer to fit a heat pump than replace a gas boiler, yet it seems this basic fact has been ignored by Whitehall officials desperate to stick to a plan no one believes in.”

Most homes in Britain are heated by gas-fired boilers, but this is a major source of carbon emissions and will need to change if thc country is to meet its aim of net zero carbon emissions by 2050.

Replacing gas boilers with electric heat pumps is one way to do this, and the Government wants roughly 600,000 to be installed each year by 2028.

It has pointed to research by the Heat Pump Assocation, a rival trade group, in 2020 which indicates about 50,200 heat pump installers will be needed by 2030, climbing to 69,500 by 2035.

However, the EUA argues the figure is likely to be more than 140,000 by 2028 to hit the roll-out target, given the time it takes to fit heat pumps and the other work and admin tasks that generally occupy a heating installer’s time.

Mr Foster added: “We are both suggesting that the target figure is wrong and won’t deliver 600,000 heat pumps a year and also suggesting ways in which the industry can help the government train more installers.” More than 40,000 heat pumps were installed in the UK in 2021.

The Heating and Hotwater Industry Council, a subsidiary of the EUA, will say in a report on Monday that to meet the roll-out targets, about 55,500 boiler installers will need to be upskilled, and 87,000 new heat pump installers will need to be trained. Estimates suggest there were about 3,000 heat pump engineers in Britain as of the middle of 2022.

The report assumes heat pumps take about three times as long to install compared to a gas boiler, and assumes similar working patterns to a typical gas installer, who it says spends more than half of their time on other tasks such as servicing, repair and plumbing.

“The principal aim of this work is to highlight that many more new installers are required in the industry to achieve the Government targets for installation of the 600,000 heat pumps by 2028,” it adds.

The EUA represents companies that make and install radiators, boilers, heat pumps, gas meters, and heat networks, including Worcestor Bosch and Baxi. It says the research on installer numbers was led by a senior manager from Vaillant, which makes boilers and heat pumps in Belper, Derbyshire.

The future of home heating is the subject of intense lobbying as policy starts to shape, and companies try to promote their technologies.

The EUA has been skeptical about heat pumps, highlighting challenges such as power supply, and supportive of hydrogen boilers. In December it wrote to the Government urging them to carry out village-scale trials of heat pumps.

The Heat Pump Association, which said its members represent 95pc of the heat pump market by manufacturing share, said it was “confident that the resources are in place to meet government heat pump installation targets and that the installer base is robust enough to help ramp up heat pump deployment”.

The Telegraph

How British Gas let down a nation

British Gas says it is founded on a proud 200-year heritage of heating homes and businesses. Yet the energy firm is facing another winter of mounting complaints after customers have been left without heating for weeks in what MPs have called a “scandal”.

This cold season has brought about yet another flurry of gripes about British Gas HomeCare, a policy that promises to promptly fix boilers and heating.

More than three million customers pay British Gas for the protection and cost of annual servicing. But this year, just as in the previous two winters, customers are complaining of long delays for repairs and five-hour waits on the phone.

It comes as parent company Centrica this week forecast an eightfold rise in annual profits after the war in Ukraine sent energy prices soaring.

Customers and critics are now demanding that the City regulator, the Financial Conduct Authority, take stronger action, more than a year after it was first asked to investigate.

Centrica’s latest accounts show that in 2021 customer complaints about British Gas Services increased by 62pc. The services arm also lost an estimated £60m to disruption caused by the pandemic and industrial action.

The energy provider’s insurance policy promises it will dispatch an engineer to customers “within a reasonable time”. In December it said it had experienced a 40pc rise in callouts but it insists that 99.1pc of vulnerable customers were seen by an engineer within 24 hours of reporting an emergency breakdown.

Yetunde Momolafe’s boiler broke down a week before Christmas just as temperatures plummeted to minus 7C (19F). But Momolafe, 42, who pays £50 a month for a HomeCare policy, is still without heating, and now hot water.

Momolafe, who qualifies as a vulnerable customer as her son has a respiratory condition, says: “When I first called them I was left on hold for over an hour.”

A string of engineers have since come to her property, but Momolafe says: “It’s been a month with no heating and now I have no hot water. I am literally having to harass British Gas to come and fix what they’ve done.”

The only option left to her is to pay for a local engineer herself, but doing so would void her HomeCare policy, leaving her a “hostage” to the insurance, she says.

It is understood that MPs could look at the company’s failings as part of a wider inquiry into energy pricing.

Alexander Stafford, Conservative MP for Rother Valley and a member of the business, energy and industrial strategy select committee, says it is “scandalous” that customers have been left without a functioning boiler for weeks.

He says: “It is completely unacceptable that there is no guaranteed timescale for an engineer, which makes these policies not worth the paper they are written on.”

Martyn James, a consumer expert, says home emergency policies are often “vague and non-committal”. He adds: “It’s clear that the insurers have no interest in defining the minimum service standards customers can expect, so the regulator needs to step in and tighten the rules to make them.”

The FCA, meanwhile, says it is aware of the issues with HomeCare and has “set out expectations” to the firm, although it refused to provide further details.

…

A British Gas spokesman said: “Our engineers work round the clock to service our HomeCare customers and we’re able to get someone out swiftly for most customers when they need us.

“We’ve invested in our capabilities, including an additional 350 engineers to manage spikes in demand, and are improving appointment availability as we know customers need us as quickly as possible.”

The Telegraph

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.