Weekend press: Tens of thousands of homes without power in the wake of three storms

This week's round up of national news stories includes coverage of thousands of homes left without power after storms Dudley, Eunice and Franklin have battered the country; fears that the conflict between Russia and Ukraine will further raise gas prices; and is it the end of the road for price comparison sites?

Storm Franklin makes landfall as flooding forces hundreds to evacuate homes

Flooding has forced people to evacuate their homes in parts of the UK as Storm Franklin makes landfall.

Residents in parts of Yorkshire and Manchester were forced to leave their homes for safety on Sunday over fears swollen rivers could burst their banks.

The Environment Agency took the rare step of issuing two severe flood warnings in Didsbury and Northenden in Greater Manchester, meaning there is a risk of “danger to life”.

It comes as the third named storm in less than a week is expected to batter the nation overnight into Monday.

Franklin will come just days after Storm Eunice left four people dead in the UK and Ireland and 1.4 million homes without power – with 55,800 still to be reconnected.

Around 56,000 people were still without power on Sunday afternoon after Storm Eunice caused what energy providers believe was a record national outage over a 24-hour period, with around 1.4 million homes losing power.

Ross Easton, director of external affairs at the Energy Networks Association, said Storm Franklin will hamper recovery efforts on Monday.

“We’re still making pretty good progress in terms of reconnections, but it’s certainly being hampered by the high winds,” he said.

Giving advice to those facing a fourth day without power, he added: “First and foremost, check on friends, family, and neighbours to make sure they’re safe and well, and if you have any concerns or need extra support, call your local network operator.”

The Telegraph

Nearly £400 a year ‘could have been saved on bills during energy crisis’ with scrapped green policy

Households could have saved nearly £400 a year in bills during the energy crisis if the government had not scrapped a green policy on homes, according to new analysis.

Data from the Liberal Democrats, seen by The Independent, increased this figure from previous estimates to reflect the rising cost of living.

It found plans to make all new homes achieve net zero emissions would have shaved hundreds of pounds off household bills when another price cap increase will see them soar in spring.

“This is yet another example of how acting sooner on climate change can save consumers money on their bills,” Chris Venables, head of politics at the Green Alliance think tank, told The Independent.

The scrapped environmental rules would have prevented new houses from releasing a net amount of carbon into the atmosphere during day-to-day running. Among other factors, this would have been achieved through good energy efficiency – considered key to keeping bills, as well as emissions, down.

The Zero Carbon Homes policy was scrapped in 2015, the year before it was due to kick in.

A subsequent report estimated it would have saved recently built houses up to £200 a year on energy bills.

New research from the House of Commons library, requested by the Lib Dems, said this figure will rise to up to £370 when household bills increase with the new price cap in April.

Large family homes built after 2016 could have saved up to this amount under zero carbon homes rules, while the minimum savings were estimated at £265, according to the data.

Bills could have been up to £220 a year less in terraced homes and up to £140 less in flats, the research suggests.

Wera Hobhouse, the Liberal Democrat spokesperson for climate change and energy, said: “These figures lay bare the Conservatives’ failure in tackling the climate crisis and how their incompetence has worsened the cost of living crisis for so many people.”

The Independent

SNP call for ’emergency Budget’ to help solve cost-of-living crisis

The SNP has called for an “emergency Budget” to be held by the Chancellor to give more support to those facing a cost-of-living crisis.

The demand comes less than a month after Rishi Sunak set out funding to mitigate the soaring cost of energy bills.

SNP Westminster leader Ian Blackford said he was “very worried” by the situation as he called on the UK Government to reverse cuts to Universal Credit, ensure £200 loans for energy costs are turned into grants and take responsibility for the situation.

Speaking on BBC Radio Scotland’s The Sunday Show, Mr Blackford said that Tory ministers have “got to do more to support people through this crisis”.

He added: “First and foremost, it’s the poorest in society that are going to suffer the most.

“The Government really should reverse the cuts to Universal Credit – the £20 uplift – that should be reinstated.

“I think there’s real concern about the £200 loan that’s going to be rolled out – that should be turned into a grant. Let’s recognise that people need support.”

Mr Blackford added: “This is a real crisis and it really needs a government to take the measures that they need to do to protect people. We really ought to be looking at an emergency budget.

“We really need to make sure that the Government, rather than focusing on getting Boris Johnson out of his hole with the inquiries into Partygate, takes responsibility for this crisis that so many people are facing.”

Pressed over concerns raised by charities that support from the Scottish Government has not been targeted enough to fully support those in most need, Mr Blackford said SNP ministers were doing all they can “within the spending limitations” of devolution.

He added: “What we’ve tried to do is get money out more effectively and efficiently so that people can be supported through this.”

The Herald

South West Water: spending cuts and dismal pollution record in tourist hotspot

The white sand beaches of Devon and Cornwall are some of the most popular tourist destinations in Britain. Unfortunately, their coastal waters and rivers are also among the most polluted. Last month the Environment Agency hit South West Water with the lowest environmental rating of the nine large privatised sewage and water companies in England and Wales. The regulator singled out the regional monopoly for poor performance, saying in 2020 it had been “consistently unacceptable” for the 10th year in a row. South West Water’s dismal record on pollution is one of a number of dubious distinctions for its owner Pennon Group, which include charging the most expensive water bills in the UK, performing poorly on leakage and ramping up debt levels to one of the highest per household. Almost all the water companies in England and Wales have slashed capital spending since they were privatised 31 years ago. But Pennon, one of three stock market listed providers of water and sewage services in the UK, with a market value of £2.8bn, has wielded the axe most vigorously. After a brief surge in investment in the first few years after privatisation, South West Water, which provides services to Devon, Cornwall and small parts of Dorset and Somerset, has almost halved real-terms capital investment in infrastructure. Its annual spending fell from a 1990s average of £320mn to £169mn in the 2020s, according to Financial Times analysis of Ofwat data and company annual reports. Cuts to investment in its waste water system since privatisation have been even sharper, falling 60 per cent from £185mn a year in the 1990s to £74mn in the past decade, according to Ofwat. These cuts are greater than the national average. Total capital investment across England’s water and sewage companies has fallen by 16 per cent, and wastewater capital investment by 19 per cent in real terms since privatisation.

Pennon argues that cuts to capital expenditure followed a substantial injection in the 1990s, which was needed because of poor infrastructure before privatisation. Yet the consequences of that decline are evident not just in the outpouring of sewage and storm water that periodically flow into coastal waters, but also in problems such as the burst pipes that in January left residents in a small Cornwall village without water for 36 hours. While most other water and sewage companies have managed to reduce leakage since 2018, in Devon and Cornwall water lost through burst and cracked pipes has increased by nearly 5 per cent over the past three years. Pennon said it was “committed to delivering a step-change” and “2022/23 will see the highest level of capital investment in the past 10 years”. “We have some of the best waters in Europe, this year achieving the highest ever bathing water quality at 100 per cent across the south-west compared with [about] 28 per cent in 1991,” it said.

But while the beaches are often commended for their blue-flag high-quality status, Hugo Tagholm, chief executive of campaign group Surfers Against Sewage, said the sporadic bathing water testing regime, only carried out between May and September, could “mask the reality of sewage spills and the risk they pose to human health”. “Even beaches rated as having excellent water quality can suffer from multiple sewage events across the bathing season, let alone out of it,” said Tagholm, who has successfully pressed water companies to release information about sewage spills to warn swimmers. Surfers frequently become sick from exposure to sewage effluent, he said, while a study by Exeter university found that they were three times more likely to have antibiotic resistant e-coli in their gut than other people. Yet, despite the environmental failures and criticism in November by Ofwat over poor service, South West Water’s customers are paying the highest bills in England, currently an average of £503 a year for water and wastewater combined.

The bills would be even higher without a taxpayer subsidy of £50 per customer. This was introduced by the government in 2013 as it accepted that higher bills were needed because the company served just 3 per cent of the population, but had to protect about a third of the country’s coastal waters. From April, Pennon said bills would fall to £472 a year, lower than a decade ago.

Residents are in part paying to service South West Water’s borrowings, which are one of the highest per customer. Although it cut its debt by £1.1bn, bringing it down to £2.2bn in September 2021, it had none when it was transferred into private hands three decades ago. In addition, it is the only water company in England and Wales to have raised dividends each decade since privatisation, according to FT analysis of Ofwat data. The figures, which include payments to parent companies, showed that the group increased dividends by about 30 per cent in real terms since privatisation, from £136mn a year on average in the 1990s to £178mn a year in the first two financial years of the 2020s.

Financial Times

Warning that Ukraine crisis could cause more energy firms to go bust amid concerns that conflict would cause cost of gas to more than double to 1,000p per therm

Even more smaller British energy companies are expected to go bust as ministers prepare for ‘more supplier failures’ if gas supplies are hit by a Russia invasion of Ukraine.

The conflict could cause the UK gas price to increase to as much as 1,000 pence per therm – more than double its peak in December which stood at just over 450 pence per therm.

The annual bill for a typical household is due to go up from £1,277 to £1,971 from April 1, but some industry analysts are predicting it will go up again to £2,300 from October 1.

In fact, the rise could be substantially higher if Russia invades Ukraine, which would hit gas supplies to Europe and drive up global prices.

An official told the Telegraph, preparations for ‘more supplier failures’ had commenced following the ongoing Ukraine crisis, ‘low levels of storage across Europe and nuclear power plants closing’.

This comes as 25 UK power firms went bust within three months last year including Zog Energy, Entice Energy, which had 5,400 households on its books, and Orbit Energy, which supplied 65,000 customers.

On Friday, Whoop Energy, which supplied 50 households and 212 businesses and Xcel – used by 274 businesses – announced they are ceasing to trade due to the sudden energy price hike.

Regulator, Ofgem, told MPs last week that current forecasts suggest another increase is likely to come into effect before next winter.

Ofgem’s chief executive, Jonathan Brearley, said wholesale gas prices are volatile and it is impossible to make any firm predictions.

But, he said: ‘When you look at the forward prices right now, there is upward pressure in prices still, so you may see a rise in October.

‘It is really hard to say what the price cap will be if Russia invades Ukraine, but…you would see significant rises again in the price that people pay.’

He added: ‘We are not experts in geo-politics but we expect that if Russia invades Ukraine – there is a sanctions regime and that Russia limits gas supplies to Europe.

‘That would drive high price rises and that would ultimately feed through to customers.’

He did not put a figure on it, but said it ‘could be of the scale we have seen before’. If so, that might mean a second increase this year of £700.

The watchdog’s director of strategy, Neil Kenward, said: ‘What the data is telling us now, if you look at futures markets for next winter, is suggesting there could be a further increase in the price cap, but actually we don’t know that yet.

‘Over the next six months, markets will respond to events such as Russia-Ukraine and other factors and that will then determine the price cap level in the coming winter.’

Details emerged in evidence to MPs on the Commons Business, Energy and Industrial Strategy Committee, who are investigating prices.

Daily Mail

Soaring energy prices leave UK comparison sites with little to compare

Sergei the meerkat and his rival Gio Compario have put comparison websites at the heart of many people’s buying decisions, but soaring energy price rises and new rules on insurance sales mean challenging times for the businesses they advertise.

At a time when consumers are keener than ever to cut bills, the websites have found themselves without any deals to offer on energy because sky-high wholesale prices mean that suppliers are not offering cheap tariffs.

The sites earn commission from companies when customers switch to them, thought to be about £30 for some energy contracts and £40-50 for insurance policies.

On Thursday, one of the biggest, MoneySupermarket, reported a 25% fall in profits last year, and said that revenues from home services, which include energy switching, were down 34%. The company said it was expecting zero revenue from its energy business in 2022.

GoCompare, one of its rivals, said 2021 was a “year like no other” in the energy market. It paused that strand of its comparison service completely in September.

“At the moment, there aren’t any competitive deals available for people to compare but we are hopeful that we can offer this service again in the near future and get back to helping our customers save money on their energy bills,” a spokesperson said.

In October, USwitch made the unusual decision to advertise to customers that they should “stay put” with their current providers and stop using its energy service until further notice. “It’s something we never thought we’d say,” a statement from the company said at the time.

The comparison sites also face the challenge of new rules banning loyalty penalties on home and motor insurance.

The regulations, set by the Financial Conduct Authority, came into effect on 1 January, and state that anyone renewing their policy with an existing provider should pay no more than they would as a new customer. Prices for customers who switch regularly have gone up, while those who stay with their providers now pay less.

At the time these rules were first announced, shares in Moneysupermarket and GoCompare’s parent company fell, and experts suggested that the incentive to shop around for insurance would reduce once the changes had bedded in.

Rising interest rates also mean the disappearance of some of the best deals on loans and mortgages.

Danni Hewson, financial analyst at AJ Bell, said the companies needed to evolve to get through the rough patch.

“They have enjoyed huge success because they’ve become an essential tool but can that tool do more to help us buy time in our increasingly busy and costly lives?” she asked.

The Guardian

Six million households face compulsory water meters

Six million households could be forced to install water meters in a bid to cut usage after the Government declared new areas at risk of running dry, despite a fifth of supplies being lost to leaks every day.

Water companies have been told to “lead by example” by cutting on waste in their own network by the Government-backed consumer advocacy group for the industry.

Water companies are allowed to force households to install a water meter in areas that have been declared as being at “serious” water stress risk where demand threatens to outstrip supply.

Households that refuse water meter installation are placed on a more expensive flat rate, which can add about £200 to annual bills.

However, companies have been criticised for relying on households to cut their usage while they lose more than three billion litres of water every day through leaks.

South West Water, which has had two of its areas newly declared as eligible for compulsory metering, increased its leakage last year despite a target to reduce it by three per cent.

Thames Water, which has the worst record for leaks, at levels twice the national average, started rolling out compulsory monitoring in 2013.

Southern Water, which also forces households to install meters, last year missed its target to reduce leakage by 50 per cent.

A spokesman for the Consumer Council for Water, a Government-backed body, said that companies should act on their own leaks before asking households to take action.

It added that water companies should provide support including reduced bills for households that would be worse off by moving to compulsory metering. That could, according to the group, include a family of four with relatively high water use that may have previously been on a low flat-rate tariff.

A spokesman added: “Metering programmes have proven successful in identifying and fixing leaks on customers’ own pipework. But water companies should be leading by example in reducing the enormous volumes of water that are lost every day and which dampen households’ own motivation to save water.”

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.