Monday, December 18, 2006


Hello There My Friends,

Hope you are well and looking forward to Christmas this year. Isn't the weather freaky at the moment - trees sprouting new leaves at the same time as shedding this year's, plants flowering in December, warmest year on record (the latest in a line of the warmest years in history that have all occured in the past 12 years - 10 out of 12 !). And some people still want to argue that climate change and global warming arent real ??!!

Mr Simpson's funeral service was the most dignified affair that I have ever had the priviledge to witness and Mrs Simpson is simply an enigma. It was a sad day but it was lovely to meet all Joe and Marjorie's many friends - they know some great people and it was a pleasure to be in their company too.

The conversation turned to how I had met Mr and Mrs S and naturally we talked about energy bills and the cost of heating your home in the UK at the moment. I note with concern that none of the older people at the funeral and the tribute lunch afterwards had even heard of local grants or the Warm Front scheme - so hopefully we can work to put that right and raise awareness. Most of the lovely people who attended could benefit greatly from these forms of assistance and also probably be entitled to more household income etc?

Big news on Friday last week - British Gas, having lost almost 1 million customers this year, have decided to reduce their domestic tarrif(s) to reflect a drop in wholesale gas prices. Hoorah !! Its only taken them 4 months to announce this - do you think they will back date any rebate ?!

Good news - but will the other energy suppliers follow suit ? I guess it depends on how many clients would switch or if they can take a drop in profits?

British Gas owner Centrica plans to cut retail gas prices in Spring 2007 after a fall in wholesale costs.

Centrica also said its full-year earnings were on target to be more than many analysts had forecast, despite losing 978,000 accounts this year.

Facing stiff competition, Centrica is restructuring and added that it would cut 1,310 jobs to boost efficiency (hope my pal Linda will be okay).

Gas companies have been criticised in recent months for passing on high wholesale prices to consumers.

'Improving margins'

Centrica said that a price cut was on the cards because the "warmest autumn on record in the UK has coincided with the predicted additional supplies of gas being delivered".

It added that the extra supplies and a 15% decline in residential gas demand meant that "although the winter is still ahead of us, margins are improving".

"Against this background we have decided to absorb additional distribution costs of around £100m per annum, and we plan to reduce prices for our customers in the spring," Centrica said.

"We remain resolute in our belief that British Gas must establish reasonable and sustainable profitability to provide long-term energy security of supply while delivering value to the customer," it explained.

Many observers have complained that firms such as Centrica were making large profits at the expense of vulnerable energy consumers who would have been badly affected by high prices over the winter months.

Centrica said its British Gas Residential Energy division had returned to profit in the second half, helping the company to top the average analyst forecast for earnings of about 18 pence per share.

Shifting work

Centrica said it planned to shut headquarters of British Gas Residential Energy at Stockley Park with the loss of 700 back office roles. The staff will be relocated to Staines.

There will also be a restructuring of the British Gas Services team, with the loss of 340 jobs, with about 270 posts to go from the group's corporate structure.

Many of the employees losing their posts will be found alternative service positions at British Gas, Centrica said.

British Gas are only doing it as a means to avoid further millions jumping ship
Paul, London

The gas provider added that it expected its price cuts to help keep customers, and that even though it had lost 6% of customers this year, the rate of churn has slowed in recent weeks.

"Moving customers onto our new system undoubtedly led to some teething problems this year," said Chief Executive Sam Laidlaw. "And service levels need to be improved."

"Signalling these price decreases should help reduce churn," he added. "We will cut customer prices in the spring, with the exact amount to be decided once we have complete clarity of winter gas costs."

British Gas van

I love that word "churn" - yet another industry term ! Let's hope that when British Gas do bring reduced rates into effect in Spring 2007 (and heres hoping its a mild winter too) that no one suffers from the delays that such a late implementation will create.... they could help to remove a lot of clients from fuel poverty but talk is cheap. Let's see some action now Sam !!

Make good choices !

From Your Friend The Energy Angel


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