Utilities Insider Issue 2

Issue 2 – 26th August 2011

Here is your second edition of Utilities Insider! – Every two months we keep you up to date with the utilities markets, including important news on industry developments, changes in regulation, and changes in price. Here’s the round up of July and August’s notable news:

Wholesale oil prices still high

In the last issue, we reported that wholesale prices were rising. That day the International Energy Agency (IEA) opened emergency oil reserves, causing the price of a barrel to drop by $6 in a single day. However, since then the oil leak in the North Sea and the ongoing uprising in Libya have caused prices of Brent Crude to fluctuate between $100 and $120 per barrel, and it currently remains high at $110 a barrel. This could drop soon as Libya has announced that only days after rebels took control of the country, oil production is on the increase. [Read Oil News]

Suppliers continue to raise gas and electricity prices

Five of the “Big Six” energy suppliers have now announced their price rises for the coming winter. Although these are for domestic tariffs, there is usually a strong link between a suppliers’ domestic and business prices. Bear in mind that the graph below shows percentage increases, not overall costs:

If any of your organisation’s business electricity of gas contracts are due for renewal in the next 6 months it is important to do a full market search, as business prices fluctuate on a weekly or daily basis. Get in touch now to ensure we perform a proper search of the market in order to obtain the most competitive rates we can. [Read Energy Prices News]

Ofgem gets tough during market review

The past few months has seen Ofgem continue with their crack down on the big six. The regulator fined British Gas £2.5m at the beginning of August for poor customer service levels, stating: “We warned the industry in March that we would be backing up our plans to reform the retail market with a tough approach to enforcement.” Ofgem also recently announced the appointment of forensic accountants that will study suppliers’ profits. [Full Story]

Minimum carbon price could threaten industry

Energy-intensive clients will be interested to know that the Confederation of British Industry (CBI) has called on the government to exempt energy intensive companies from paying a fixed carbon price, in order to prevent it driving them overseas. The government currently plan to charge a minimum price for carbon from April 2013, but the CBI has warned that “The Government is in serious danger of throwing out the baby with the bathwater if it continues to pile new costs onto industries.” [Read Renewables News]

Shale Gas debate continues

A promising yet controversial new method of gathering natural gas from shale rock has had some significant developments over the past few months. Whilst ‘fracking’ technology was suspended in France due to environmental concerns about polluted waterbeds and damage to wildlife, the world’s largest mining company, BHP Billiton, invested £7.5bn in the acquisition of an American shale gas firm. [Full Story]

We hope you are finding Utilities Insider useful. If you have any feedback, queries, or suggestions please email us, call us on 0845 33 75 997 or enquire through the website at http://utilitiessavings.co.uk.

Kind Regards,

Utilities Savings

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