British Gas owner Centrica has just announced results at a time when the country’s regulators are asking the energy companies to pass on more quickly to the customer the drop in wholesale prices.

But whilst Centrica admit in their financial statement that there was a substantial drop in both electricity and gas wholesale prices in 2009, it warns that they will be heading north again in 2010.

In their performance review, Centrica said:
“In 2009, energy was once again never far from the headlines. Wholesale UK gas and electricity prices both declined sharply from the levels seen during 2008 and while the forward curve indicates that they will rise again during 2010, it is clear that we are in a very different commodity price environment from that experienced in 2008.

“This comes at a time when the UK Government recognises that unprecedented levels of investment will be required across the industry if security of supply is to be maintained and tough environmental targets met.”

As for the financial performance of Centrica, for 2009 it recorded revenues of £21.96 billion, up 5% from 2008. Operating profit rose from £661 million in 2008 to £856 million in 2009.

As for the year’s achievements, Centrica made a major acquisition which increased its gas and oil reserves by 50%. It also took a strategic position in nuclear power by acquiring a 20% equity in British Energy, a company which owns and operates all of the UK’s nuclear power stations.

It highlighted a strong performance from British Gas, which included operational improvements and price reductions. It pointed out that there were some 550,000 additional product holdings, which included 164,000 additional households taking both energy and service products.

What’s more, British Gas’s commitment to the growing emerging energy efficiency market would create 1,100 new jobs in 2010.

Sam Laidlaw, Chief Executive of Centrica, said:
“2009 was a year of significant achievement for Centrica with British Gas now transformed and the completion of the Venture Production and British Energy transactions. Our existing strategic priorities have now been achieved, and today we have announced new priorities to build on the robust, vertically-integrated business model that we have in place. Centrica is well-positioned to pursue growth opportunities and lead the drive to a low-carbon world, whilst maintaining the financial discipline to secure strong returns on our investments.”

Guest Article by Neil Camp

The largest supplier of residential gas in the UK, British Gas, has cut its standard gas prices by an average of 7%.

For the average gas customer, this will mean a reduction of around £55 a year from their bill. It is thought that some eight million households will benefit from the cuts and the price changes take effect immediately.

Bearing in mind this is the third British Gas price cut in the past 12 months, it means that nearly £190 has been chopped off the average annual dual fuel bill.

Phil Bentley, British Gas Managing Director, said:
“At British Gas, we know household budgets are stretched, and that our customers are concerned about the effect the recent cold weather will have on their winter fuel bills. I’m pleased we’re able to offer our customers some extra help with this gas price cut – and that we’re able to do this while it’s still winter, allowing our customers to really feel the benefit.

“This latest price cut means that, no matter where you live in Britain, British Gas is offering on average the cheapest standard gas, electricity and dual fuel prices – beating all other major suppliers. But, at British Gas, we know that cutting prices is just part of the picture in helping our customers cut their fuel bills; we’re also doing more than any other supplier to help our customers use less energy. As well as cutting prices three times in the past year, we have been helping our customers improve their energy efficiency and cut their energy use by 7%.”

British Gas claim that last year, they cut both standard gas and electricity prices by an average 10%. And the May 2009 electricity price reduction saw British Gas become on average the cheapest supplier of standard electricity across the UK.

What’s more claim British Gas, this latest gas price cut means that they are now also the cheapest major supplier of standard gas at average consumption, and therefore of dual fuel, right across the UK.

In another move, British Gas has also removed the price ‘differential’ for gas pre-payment meter accounts, meaning that pre-pay gas customers are now paying, on average, the same for their energy as customers who pay by cash, or cheque.

Find out more about British Gas here.

Guest Article by Neil Camp

The boiler scrappage scheme was welcomed by consumers and industry alike as a great way to help people improve the efficiency of their heating systems and at the same time stimulate flagging businesses, but the scheme has hit problems.

Recent national newspaper reports have revealed that applicants are waiting to receive their vouchers and the call centres are experiencing a backlog of calls.

The scheme is so structured that only those with a voucher (received after lodging a valid quote from a Gas Safe Registered heating engineer) can have the work started. But the vouchers are reportedly suffering long delays as scheme staff cannot cope with demand.

The voucher is worth £400 and was created to encourage people to swap their old boilers – rated G, X or non-rated – for new A rated boilers which are over 90% efficient as opposed to between 50% and 70% efficient. The scheme is being administered by the Energy Saving Trust.

But such was the enthusiastic response that the call centre had quickly received some 160,000 calls for the limited number of vouchers available: at the moment, 135,000. And some 36,000 applicants had been received.

At least say the reports, the number of call centre staff has been doubled and it is now claimed that people who qualify under the scheme will get their vouchers within ten days.

The chief operating officer at the Energy Savings Trust told the media that they had taken the necessary steps to cope with the demand and that things had been dramatically improved, with only a few days backlog remaining and a return to normality quite soon. This included an automatic email being sent to those who contacted the Energy Savings Trust about the boiler scrappage scheme.

The biggest installer of new gas boilers in the UK is British Gas and they have reported that in the first three weeks of January, they had seen a four-fold increase in the number of people asking for a quote as compared to the same period last year. British Gas offer a further £400 rebate over and above the Government voucher, and also offer other incentives on maintenance schemes, services and fittings.

Observers are now concerned that the Energy Savings Trust will have difficulty in processing the payments in time when vouchers are redeemed. The scheme says that voucher payments will only be made on receipt of a valid voucher and paid Gas Safe Registered engineer’s invoice. Payment should then take place in 25 days and the worry is that this system will suffer the same delays as the start of the process.

Guest Article by Neil Camp

British Gas is asking for volunteer customers to join a 20-strong panel which will help write a report on how the company is operating. Advertisements were today placed in a number of national newspapers outlining their intentions.

At the same time, and as part of a much publicised move, British Gas is offering its customers the chance to pay accurate energy bills, rather than paying an amount based on an estimated meter reading.

Bills based on estimated readings have been the thorn in the side of many energy companies and research by British Gas has shown that such bills are very unpopular amongst its 16 million customers.

Instead, the energy giant is asking for customers to send their monthly readings either by text, or online. And people who opt for this service will receive a monitor, provided free, which accurately displays their use of electricity on a minute-by-minute basis.

A British Gas spokesperson said:
“Instead of issuing you with a bill we will contact you by email or text and ask you to submit a reading from the normal meter. Estimated bills were seen as a source of frustration by customers as they didn’t accurately reflect the energy they had used.”

British Gas apparently were at pains to point out that the new monitors are different from those currently being recommended by the Government.

The monitors from British Gas are designed to be installed by the user and come in two parts. One gets attached to the house’s existing meter and this communicates, via a wireless link, with the second part, which is the display. This is powered from an ordinary plug socket. And the display not only tells the user how much they are paying for their electricity on a daily, weekly and monthly basis, but also tells them how much C02 they are generating.

Although readers of this blog might remember a story a few weeks back about an Eaglestone pensioner who opted for a free gas meter upgrade found herself with a bill of £168.

And what made matters worse, she was left with no heating, or hot water. The 73-year-old responded to a British Gas offer to update customer’s technology which is part of a countrywide initiative.

An engineer made the visit, fitted the new meter and then tried to relight the pensioner’s boiler. After three attempts he gave up and left, saying it was no longer his responsibility, leaving the boiler unlit and the house cold, and without hot water.

The problem was eventually sorted out and to be fair to British Gas, it appears that the boiler might not have been regularly serviced, which meant that when it came to relighting, it would not operate properly.

But it does alert user’s to the fact that although modern monitors and meters are the future, some care should be taken as to what might happen if, after their installation (and this new one is to monitor electricity, not gas), systems don’t work as before.

Guest Article by Neil Camp

Energy company British Gas is going on the offensive with a number of projects to help thousands of people on low incomes cut their energy use and lower their fuel bills.

A multi-million energy efficiency programme has seen British Gas sign agreements with ten communities across the country to help local authorities and charities assess the best energy efficiency measures to install on a community-wide basis.

British Gas say this will be a campaign worth around £70 million and measures will include insulation, draught-proofing and heating schemes, as well as home energy assessments across a wide range of housing stock.

The approach to be adopted by British Gas is known as ‘whole house’ and means that measures will be decided according to what best fits local housing and will involve the entire house instead of a single measure on a one size fits all basis.

British Gas use Walsall for an example, where work is expected to include external solid wall insulation and switching homes from high cost electricity heaters, to lower cost gas central heating.

Work in all the projects will not just take in energy efficiency measures, but will also include a range of related services such as benefits assessments. In the case of Walsall, it represents part of The Community Energy Saving Programme (CESP) which is a joint initiative between energy suppliers, power generators and the Government. The total value of energy efficiency measures installed here will be around £350 million.

Over 90,000 households are expected to benefit from The Community Energy Saving Programme which targets low income families. The programme is unique in helping the hard to reach people who have typically not benefited from other national energy efficiency initiatives.

And the programme is also thought capable of saving four million tonnes of CO2 emissions.

Phil Bentley, Managing Director of British Gas said:
“Households account for a quarter of the UK’s total CO2 emissions. By focusing on homes, and in particular vulnerable communities which have been traditionally hard to reach, we can make a significant impact on our national carbon footprint and cut the bills of Britain’s most hard-pressed families.

“As the country’s biggest energy supplier we are well-placed to take the lead in helping people become more energy efficient. This is why we’re very pleased to be the first energy supplier to begin CESP projects.”

On behalf of the Government, the Energy and Climate Change Minister Joan Ruddock lent her support to the first wave of CESP projects and said:

“I’m pleased that British Gas has been so quick off the mark to begin work in these ten areas and identifying the communities that will benefit. The Community Energy Saving Programme will help some of the lowest income households across Britain tackle fuel poverty. I look forward to hearing about the other energy company plans which will ultimately benefit around 90,000 homes over the next three years.”

As well as working with local authorities, British Gas will also liaising with a number of charities including Scope, Help the Aged, Money Advice Trust and the RNIB.

Sian Mexsom, Head of Fundraising Partnerships at Age Concern and Help the Aged, said:
“We’re delighted to be able to support British Gas in such a tremendously important programme. Through our work, we reach out to disadvantaged older people across the UK who tell us how they’re forced to live in just one heated room of their house in the colder winter months. We’re hopeful the CESP projects will help change this.”

Homes in Birmingham, Chester, Dundee, Glasgow, Haringey, Swansea, Knowsley, Preston, Southwark and Walsall will be in the first wave of The Community Energy Saving Programme.

Guest Article by Neil Camp