May 17, 2020

Winter taking a toll on utilities, customers

Admin
3 min
Cold winter weather
[email protected] Make sure to check out the latest issue of Energy Digital magazine By Adam Groff When the temperature drops, both utility companie...

Make sure to check out the latest issue of Energy Digital magazine

By Adam Groff

When the temperature drops, both utility companies and customers feel frostbitten in terms of service and power costs.

With winter storms taking their toll across the South, Northeast, and Midwest, negative temperatures are causing utilities nightmares for paying customers and the power companies that serve them.

Here are just a few ways harsh winter weather creates problems for utility companies and you, the customer:

Increased prices

As natural gas prices skyrocket and oil costs increase by the barrel, utility companies have no choice but to raise rates. This creates an issue for paying customers, especially when winter weather calls for 24-hour home heating via propane furnaces and electric heat.

Pushed air propane furnaces are the main form of heating for homes across the Northeast and Midwest. But, according to a New York Timesreport, propane resources are dwindling due to overuse. This translates to unaffordable rate hikes for customers in winter weather regions.

Power outages

Over usage and winter weather complications like icy power lines cause power outages, which are a major issue for utility companies and their customers. Sometimes these outages affect hundreds of customers, but oftentimes they affect thousands.

When outages sweep winter weather regions, it results in dangerous living conditions for customers and around-the-clock service calls for power companies.

These two factors combined translate to understaffed power companies and customers going for days without heat and electricity.

Cold weather rule

When temperatures drop to dangerous lows, regions across the Midwest and Northeast must evoke the cold weather rule. This rule prohibits local utility companies from disconnecting power to nonpaying customers during the winter.

Although this may seem like a necessary precaution, when harsh winter conditions roll around and costs increase, utility companies are left covering the bill.

So, when planning for utility costs in your monthly budget, utility companies encourage offsetting the increased rates by lowering your usage during milder seasons.

Customers and companies working together

Severe winter weather is everybody's problem, so it only makes sense that utility companies and customers work together to make it through the cold winter months.

Here are just some examples of how local power companies and customers can fight the winter weather together:

• Patience during outages - If your power goes out during a winter storm, chances are your local utility company already knows about it. The best courses of action after you've called to report the outage is to be patient. Increased service calls only slow down the utility companies in times of emergency.

• Cold weather checklist - Preparedness makes outages easier to deal with, so make sure you're prepared for a winter weather emergency. This includes having batteries, a portable cell phone charger, a battery-powered radio, extra blankets and winter clothes, kerosene heaters, space heaters, and firewood on hand while utility companies restore your power.

• Paying attention to winter weather warnings - From winter weather advisories to frost and freeze warnings to winter storm watches, forecasters are a great resource when it comes to inclement weather. Paying attention to incoming weather is the best way to avoid all kinds of problems that arise from severe weather conditions.

When harsh winter weather is in the forecast, there are plenty of ways for utility companies and their customers to avoid cold weather complications.

About the author: Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including finances, personal health, and home improvement.

Share article

Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

Share article