Analysts have played down concerns that the UK is facing an energy crisis this winter, following an electricity supply warning posted yesterday by National Grid, the UK gas and electricity transmitter. National Grid called for power producers to supply an extra 300 megawatts (MW) of electricity, prompting reports the UK could face an energy supply shortage this winter. The ‘transmission system warning’ comes as Norwegian gas supplies along the Langeled and Vesterled pipelines have decreased after high flows during the summer. There is also concern at the delay to the completion of two liquefied natural gas (LNG) terminals in Milford Haven in south Wales, one of which was expected to be online this winter.High UK wholesale gas prices are currently being traded for the winter months. Despite this, analysts say the UK is not in the short term facing an energy supply crisis. James Ball, president of industry consultancy Gas Strategies Group, said the delay to the two import terminals at Milford Haven will have little effect. ‘Neither the Isle of Grain or Teesside [import terminals] are full, so the delays at Milford Haven make little difference.’ The amount of LNG coming in to the UK depends on price differentials. Because LNG is carried by ship, producers in the Middle East and elsewhere can follow the high-priced markets, which at the moment are Japan and Korea. But Ball said that LNG prices in the UK could soon match the prices in Japan and Korea, thereby enticing more gas into the UK. Ball said the decreasing pipeline flows through Norway is most likely a ‘temporary phenomenon’ and gas will come in greater quantities once the UK price moves up. Even so, analysts are not expecting residential gas prices to rise like during the winter of 2005-06 when the UK’s biggest gas store was shut down after a fire. ‘There will not be serious problems with supply in the short term,’ said Jon Dunningham, an analyst at Seymour Pierce. The gas prices this winter will not reach the level of two years ago. A spokesman for UK watchdog Energywatch said that he did not expect residential gas prices to rise this winter. ‘All the problems envisaged in terms of supply have been remedied. We dont see any need for upward pressure on prices. Wholesale prices have stabilised in the last 18 months. A National Grid spokesman said: ‘The transmission system warning does not mean there is not enough demand. We issue several a year to ensure that we have a safety cushion of spare capacity. It does not say anything about security of supply problems. It is a routine part of the market.

The latest independent Customer Satisfaction Report, published by uSwitch.com, reveals that there might be an end in sight to British Gas’ customer service nightmare. Although the energy giant has been voted Britain’s worst provider for the third time running, the good news is that it has seen almost a 20% improvement in customer satisfaction levels. The bad news is that there is still an 11% gulf between the best performing company (SSE) and British Gas. In fact, compared with SSE, British Gas customers are seven times more likely to have a problem. The report indicates that measures taken to try to turn service around have begun to bite and consumers are starting to feel the difference. The turnaround cannot come too soon for the giant. Recent energywatch figures revealed that British Gas accounts for 80,541 or 63% of all consumer cases received by the watchdog more than all the other suppliers put together. It was also recently the focus of an exposé on BBC’s consumer affairs programme Watchdog criticising it for heavy handed tactics and poor service. The uSwitch Customer Satisfaction Report, based on responses by over 7,700 energy customers in the UK, suggests that the industry as a whole is gradually winning customers over. A year ago (October 2006), only half (52%) of customers were satisfied and only 36% would recommend their supplier to a friend. Both scores have crept up to 66% and 47% respectively. Just over half of consumers (56%) now say that suppliers are offering value for money (40% a year ago), but less than half (45%) think that the deal they are getting from their supplier is the best for them (36% a year ago). Even billing which has caused much contention between the industry and consumers and saw the sector voted worst for inaccuracy out of ten well-known industries in a recent survey seems to be improving. 64% are satisfied with how they are billed now, compared with 57% a year ago. However, there is still a long way to go. Over a third (34%) of consumers are not getting a satisfactory service from suppliers and latest energywatch figures reveal 128,553 consumer cases made between March and August 2007 a 50% increase year on year. Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “Poor customer service has plagued the energy industry for years, but consumers have successfully forced the issue with suppliers by making it clear that they won’t pay first rate money for a second rate service. As a result, consumer concerns seem to be getting more air time in suppliers’ boardrooms and service levels are finally heading in the right direction. “These improvements are very welcome, but they are the first step on a long and rocky road. The industry is still leaving a third of consumers dissatisfied and there is an 11% gulf in satisfaction levels between the worst and best suppliers. If consumers want good service and not lip service they need to keep the pressure on 9.3 million households have still not taken advantage of competition by switching to a better provider. “Consumers also need to keep an eye on their supplier’s prices – the difference between online and standard plans keeps growing. On average a standard plan customer will be paying £143 more than an online customer, but in the worst case this stretches to £188. However, only one in eight households are on an online plan. If consumers want to get the best value for money they should take up one of these cheaper plans with a supplier they can trust to provide first class customer service.”

Customer Satisfaction Report highlights:

Scottish and Southern Energy is fast becoming the customer service benchmark for the industry. It has now been voted best supplier by consumers for the fourth consecutive time. Three quarters of its customers (75%) are satisfied with service (up from 61% a year ago), which means that while setting the standard for others, it still has scope to improve and maintain its edge on the rest of the industry.

British Gas led the way with price cuts this year. It cut £208 on average off its standard plan prices, but is still the fourth most expensive standard supplier. Recently it has focused on offering the cheapest online tariff in the market, which is currently £170 cheaper than its standard plan. This may be why consumers now rank it higher for offering the best available deal allowing it to move up from 6th position six months ago to 4th now.

British Gas has suffered with customer service and billing issues for some while, leading to it being voted worst supplier for the third consecutive time. According to new performance figures from energywatch, on average its customers are three times more likely to have problems than those of other suppliers, plus in two years there has been a fourfold increase in the number of British Gas customers contacting energywatch for help. However, it has invested in new customer service systems and MD, Phil Bentley, has made a firm commitment to tackling customer service issues.

This is now bearing fruit and it is only because other suppliers have also improved their service that British Gas has not seen its efforts rewarded with a shift out of bottom position. However, with both EDF Energy and npower firmly within its sights – both ranked less than 1% higher than British Gas – the country’s largest supplier has everything to strive for over the next six months.

Key areas to focus on are billing and customer services – ranked 5th for both – and its transfer processes (the switching of customers) where it ranked last.

Powergen is a real turnaround story. In March 2006 it was ranked bottom with only 49% of its customers satisfied, but ever since it has consistently improved, to now reach 2nd place with 67% of customers satisfied.

The company has achieved this through initiatives such as: moving call centres back to the UK; improving training for advisors and giving them full responsibility for the end to end management of a customer query; increasing salaries of advisors to improve performance and to recruit and retain the best people; launching a dedicated complaints line staffed by the most experienced advisors and launching new, clearer bills for customers.

npower is most in danger of slipping into the worst supplier spot. Although it has increased its customer satisfaction score by a very respectable 17% from a year ago, other suppliers have also upped their game leaving npower towards the back of the pack. Consumers ranked it last for billing, best available deal, online services, meter reading services and customer service. Perhaps not surprisingly, only 42% of customers are prepared to recommend it to a friend – least out of all suppliers.

EDF Energy has seen its satisfaction ranking slip from 2nd six months ago, to 4th today, even though its actual score increased by 5% from six months ago. The company is improving, but not to the same extent as its peers. Some of this may be consumer pay back for its apparent reluctance to reduce prices earlier this year. The company has particularly suffered by being ranked last for value for money and second from last in offering customers the best deal and for customers prepared to recommend it to a friend.

ScottishPower has started to claw its way back up again after receiving a shock from consumers six months ago. At that time, it was the only supplier to see its overall satisfaction levels decline and the only one to go down in ranking – it slipped from 2nd to 4th place. However, it has rallied by increasing satisfaction levels by 9% to take 3rd place.

Consumers ranked it top of the big six for online services and meter reading, 2nd for offering customers the best available deal and on offering value for money. 46% of consumers would recommend it to a friend, putting it into 3rd place in this category.

The UK water watchdog said today that written complaints to water companies increased by nearly 31 pct this year, with billing and charging concerns making up half of the complaints. Figures compiled by the Consumer Council for Water showed that 78 pct of the 241,000 complaints came from customers of Macquarie Bank’s Thames Water, United Utilities PLC and Severn Trent PLC. Customers of Portsmouth Water, Yorkshire Water, Dee Valley Water, Folkestone and Dover Water and Tendring Hundred Water filed the lowest number of complaints per 10,000 customers. Yve Buckland, national chair of the Consumer Council for Water, said: ‘Water customers are becoming increasingly demanding of their companies. They see water companies making good profits and expect service, if not improving, then at the very least delivered to a good, consistent and reliable standard. They also want complaints dealt with ‘right first time’. We will be pushing water companies to improve these figures and provide a much better level of customer service, comparable with the best in other service sectors.

Britain faces the prospect of power shortages and soaring prices this winter after the National Grid warned of a shortfall in electricity-generating capacity yesterday. The alert coincides with a surge in gas prices, which are now 40% higher than in continental Europe, and the confirmation that a vital import plant in South Wales will not be operational this winter. And it emerged last night that the energy minister, Malcolm Wicks, met power providers and users last week to discuss mounting concerns that the UK was heading into another winter of soaring prices and power shortages, similar to the one that forced some manufacturers to shut down capacity 24 months ago. The warning by the Grid, which operates the pylons and other parts of the electricity transmission system, came days after it reassured ministers that an earlier alert was nothing to worry about and that there were no expectations of power blackouts this winter. The fragility of the country’s power infrastructure is partly the result of a series of breakdowns at the UK’s ageing nuclear reactors. It is an embarrassment to the government, which has often insisted that two years of price peaks and insecurity would end in 2007 as Britain benefited from extra investment in pipelines and import facilities.

South Staffordshire Water was on Monday sold for £400m by Arcapita, the Bahrain-based investment group, to Alinda, a US infrastructure fund. Arcapita, which also owns Northern Irish electricity supplier Viridian, bought South Staffordshire Water in November 2004 for £245m ($504m). The group did not disclose the terms of its deal with Alinda on Monday, but people close to Arcapita said the water assets had been sold for about £400m. The deal is the latest in a series of sales in the UK water sector. This month Royal Bank of Scotland sold Southern Water to a consortium led by Australia’s Challenger Infrastructure Fund and JPMorgan Asset Management for £4.2bn, a 30 per cent premium to its regulated asset value. Analysts said that both the South Staffordshire and the Southern Water deals showed that infrastructure fund and pension fund investors’ appetite for water assets had not been diminished by the credit squeeze. One analyst said there would be more water deals in the near term, with Kelda, Yorkshire Water’s owner, and Northumbrian Water the most likely targets. South Staffordshire Water supplies water to 1.25m people in the Midlands. As well as this regulated water business, South Staffordshire Water owns several non-regulated subsidiaries including Hydrosave, which specialises in leak detection, and Aqua Direct, a bottled water and watercooler business. The group employs about 1,400 people and in the past financial year generated £120m of revenues and £27m of operating profit.

UK energy provider RWE npower is piloting an SMS smart metering service in a bid to improve services to its pre-pay customers. Rather than top up energy credit at a shop or other outlet and then physically plug their key or card into their meter, customers in the RWE npower trial are using their cell phones for the whole procedure. Following the same model as pay-as-you-go cell phones, customers recharge their account on their phone or over the internet, which prompts an SMS message to be automatically sent to update the meter. One in seven people are pre-pay energy customers in the UK, but they are a costly and complex group to manage, partly because they take up far more call center time. Pre-pay customers generate quite a lot of calls and typically they may raise an issue that needs someone to be called out in a van or another call to be raised, said Rich Hampshire, principal consultant for energy and utilities at LogicaCMG. With the new SMS system implemented by LogicaCMG and Onstream, People sat in the call center can call up a meter and put emergency credit onto it remotely, said Hampshire. SMS messaging is just one of range of smart metering technologies designed to track how much energy people use, giving customers greater visibility and control over their energy consumption. The UK government outlined its commitment to smart metering in its energy white paper earlier this year, though it didn’t go into specifics about when the technology should be introduced. Smart metering is set for rapid expansion, according to a recent Datamonitor report. In five years, it expects 41% of European households and 89% of US homes will be kitted out with energy meters, compared with only 6% penetration today. Like RWE npower, most UK customers are currently experimenting with the technology, and there is still a lot of work needed on standardization of communications protocols to promote more widespread adoption. One of the key aims of smart metering is to prompt customers to think more carefully about their energy consumption and make changes in their behavior to lower their bills. This cost incentive is even stronger for businesses, said Hampshire, as it reduces the burden of making monthly or quarterly readings across multiple sites and helps them identify energy hot spots and make changes to reduce usage in those sites.

Industry group insists rolling out simple clip-on meters could hamper the adoption of the sophisticated smart meters needed to cut energy use. The government was today accused of hindering the widespread adoption of smart meters and imposing unnecessary costs upon energy companies through its plans for the rollout of simpler clip-on electricity monitors. As part of its Energy White Paper the government has proposed that energy companies should be mandated to supply customers with free clip-on monitors that are attached to the energy meter and send a signal to a monitor elsewhere in the house showing householders how much energy they are using in real time. However, the Energy Retail Association (ERA) and energy meter company Onzo have today joined forces to criticise the move, which they claim will hinder the adoption of more sophisticated smart meters that provide two-way communication with energy companies and can underpin a range of functionality, such as notifying customers if they are using too much energy or automatically turning off appliances when electricity costs are at their highest. Speaking ahead of next week’s close to the consultation period for the billing and metering section of the whitepaper, ERA chief executive Duncan Sedgwick said that imposing clip-on meters upon the industry would fail to deliver the desired benefits of reducing household energy use. “This proposal is a distraction to the rollout of smart meters, which crucially include gas as well as electricity, as the devices will be redundant when smart meters are installed,” he said. “Now is the golden opportunity for the government to give us the green light on smart meters.” Joel Hagan, chief executive of Onzo, added that currently the whitepaper only expresses an expectation that sophisticated smart meters will be rolled out and urged the government to set mandatory targets. “We want to see smart meters rolled out on an aggressive seven year timeline, ” he said. “The clip-ons could cause a delay to that meaning it could be 12 to 15 years before we see widespread use of smart meters.” He insisted that smart meters would represent a win-win scenario, benefiting the government, customers and energy companies. “The government should want them as they will help it meet carbon cutting targets, customers will appreciate lower bills, and even the energy companies are broadly in favour as it means they don’t have to invest as much in meter readings and call centres,” he argued.