Use less, says gas firm (From Oxford Mail)

Use less, says gas firm

11:04am Thursday 25th February 2010 in

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Here is a conundrum which must long have puzzled many. Why would a public company, which exists with the avowed intent of making money for its shareholders, encourage its customers to use less of its product?

The Oxford Times recently received a press release from British Gas, telling us of a praiseworthy green programme the company was sponsoring to find which community can “do most to cut energy use, lower carbon emissions, generate their own energy and increase engagement in green areas”.

The incentives for competitors is a £100,000 prize to spend on a local environmental project of the winner’s choice. Would an advertising campaign supporting the slogan: “Pss. Don’t Use Gas. Tell Sid” go down well, I wonder? (to paraphrase the “Tell Sid” campaign orchestrated by Margaret Thatcher’s Government when British Gas was privatised).

But British Gas, with its corporate logo of a flame, has answers to this apparent paradox.

Spokesman Elliott Grady said: “In a nutshell, to be successful in the decades ahead, energy companies need to adapt to help their customers use less energy.

“Rather than being a threat, this is an opportunity.”

So the company is building up the business of supplying energy efficient products such as new boilers, home insulation, and solar panels. That is its new business, supplementing its traditional role of supplying gas.

In the running to win that £100,000 is the All-in-One group of Tackley, one of 14 groups out of 100 in the final head-to-head contest. Just being shortlisted has earned them £137,000 worth of energy-saving equipment and advice.

The group set up its own community-run village shop and post office in 2004 after the former shopkeeper and postmaster threw in the towel, complaining of too much competition from supermarkets.

Now the group is planning to install solar panels on the roof of that shop, which is in the same building as the village hall, to power both village churches: Church of England and Methodist.

The group will also offer energy audits to 80 homes in the village along with smart meters, designed to encourage residents to go easy on energy use.

There will be an energy day later in the year at which villagers will discuss savings, and the village primary school will organise an energy project for the children. The objective is to cut energy consumption by 25 per cent.

Barbara Vaughan, director of the village shop and chairman of the village hall, said: “The photovoltaic solar panels will take up £100,000 of that and the rest will go on energy audits and smart meters.

“The 80 households involved had to agree to switch to British Gas, which is fair enough.”

She added: “The energy collected will be sold to the grid and the money divvied up between the churches, the shop, and the hall.”

The project has the blessing of Witney MP David Cameron. He said: “I am delighted that Tackley has won its bid for support from British Gas to reduce energy consumption throughout their community.”

He added: “Tackley is a very pro-active village in my constituency and the residents’ high sense of community spirit has led to a track record of projects being brought to fruition.”

The Tories, incidentally, are committed to continuing the Government’s new Feed-In Tariff scheme (FIT) which offers people who sell electricity generated by micro-schemes between 20 and 35p per kilowatt/hour.

But to return to that paradox of British Gas and that brightly-burning-flame symbol, British Gas says a quarter of climate-changing carbon dioxide emissions come from our homes. For utility companies to be successful in the 21st century, they need to adapt and take an active role in helping customers use less energy.

To achieve that end, British Gas says it employs 9,000 engineers and a network of training academies to increase its ability to bring energy efficiency and microgeneration to the mass market. It installs 120,000 boilers a year (at present there are more than four million inefficient boilers in British homes, using 30 per cent more energy than they need). It also carried out about 270,000 loft and cavity insulations last year, saving consumers about £30m in energy bills.

But at the same time there is no doubt that much of British Gas’ revenue still comes from selling energy, both gas and electricity — some would say its tariffs encourage customers to use more of the company’s energy.

For instance, in the case of electricity, there are the “tiered” tariffs which offer decreasing charges the more you use. Then there are standing charges which some might say penalise people who use less fuel.

Mr Grady said: “We don’t offer one set price for all fuel as our customers tell us they want different things and so we tailor our services accordingly.”

The point here is that British Gas, despite its laudable work in helping us all to cut back on energy, is a hard-nosed commercial company with the job of making profits for its shareholders. It is not a social enterprise.

Witney not-for-profit energy-supplying company Ebico, which supplies energy to consumers at only one rate per unit — much as you would buy a litre of petrol — is committed to cutting out “opaqueness” in billing. Managing director Phil Levermore would not comment on British Gas’s business but he did comment on his own.

He said: “We are not answerable to shareholders and we started Ebico in Oxford in 1999 with the intention of making it easier for consumers to take control of their energy use by making the tariff clear and simple. We wanted to fight opaque bills and help people in fuel poverty.”

This week Oxford West and Abingdon MP Dr Evan Harris switched his energy supply to Ebico.

By cutting out the standing charge and asking customers to pay only for the gas and electricity they use, Ebico encourages them to take control of their energy bills and provides a real incentive for them to reduce their everyday consumption.

“This saves money and helps the environment,” said Dr Harris.

Ebico chairman Hugh Lee added: “For low-energy users, standing charges can account for up to half of the cost of energy bills.”

In any case, here’s wishing the people of Tackley good luck in their efforts to use less energy.