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The civil servants with ears only for the major energy suppliers

ImageNon-residential buildings are frequently overlooked when it comes to making energy policies. Perhaps we should look at them in a slightly more positive way

“The Department for Business, Enterprise and Regulatory Reform acts like a wholly owned subsidiary of the major energy companies”. That is the view one of the leading campaigners for a windfall tax, upon the enormous increase in such companies’ profits as a result of soaring fuel prices.

Certainly, BERR has fought a strong rearguard fight against such a measure, duly reaping this kind of opprobrium for doing so. Doubtless there will be some officials who think it a monstrous caricature. But there are other worrying signs of what the Americans call “agency capture”. This column is devoted to what can only be portrayed as another example of this phenomenon.

Stimulating energy saving

In 2005, all the governments in the European Union agreed to implement a directive, the name of which vividly described its objective. Entitled “Energy End Use Efficiency and Energy Services,” it is intended to stimulate energy-saving improvements in every part of the economy – apart from that already covered by the European Emissions Trading Scheme. And was to be fully implemented by each government by May this year.

The tabloids are convinced that only we Brits ever bother to implement European directives in full. If anything, we have a tendency to go over the top, and do far more than is necessary to comply. In response, BERR not only has a unit set up to ensure such “gold-plating” never occurs. When it metamorphosed out of the old DTI last year, it signalled this in its very name; don’t forget that the RR in BERR actually stands for Regulatory Reform.

Belatedly, plans have been issued by BERR regarding how certain parts of the Energy End Use Efficiency and Energy Services directive will be implemented. As they stand, these plans quite deliberately flout the legal requirements of the directive. They do so in a way which damages the interests of the 4m small- and medium-sized companies (SMEs) in the UK.

The BERR proposals deny every SME its right to information concerning fuel usage, which the Directive mandates be provided for them. Information which would undoubtedly help such companies know more detail about, and so control better, their energy consumption.

Inevitably dealing with these directives is a matter of considerable technical detail. Readers of a nervous disposition may blanch if I say that my grouse concerns the way in which the explicit words of Article 13.2 and Article 13(3) (b) are being deliberately flouted. Nonetheless, it is worth quoting the legal text in full, in order to appreciate how much they are being ignored.

The first states that “Billing on the basis of actual consumption shall be performed frequently enough to enable customers to regulate their own energy consumption”. BERR’s plans water this down, so that the majority of SME businesses need only receive accurate bills once every 12 months.

Nobody can make the case that this is anywhere near accurate or frequent enough to enable consumers to respond to changes in energy prices, or seasonal variations affecting energy demand, to regulate their own energy consumption. If this is implemented, the UK will be in contravention of the Directive.

The second Article sets out the information that bills should contain, including:

  • “(a) current actual prices and actual consumption of energy;
  • (b) comparisons of the final customer’s current energy consumption with consumption for the same period in the previous year, preferably in graphic form
  • (c) wherever possible and useful, comparisons with an average normalised or benchmarked user of energy in the same user category;
  • (d) contact information for consumers’ organisations, energy agencies or similar bodies, including website addresses, from which information may be obtained on available energy efficiency improvement measures, comparative end-user profiles and/or objective technical specifications for energy-using equipment.”

BERR’s plans completely ignore each and every one of these requirements. There are currently no requirements for suppliers to provide this information to business customer. Again, this is in direct contravention of the Directive.

Suppliers set to benefit most

Who stands to benefit from this deliberate relaxation of what ought to be statutory requirement? The answer is simple. It is the energy suppliers. It is not as if BERR have not been warned. The Federation of Small Businesses has done so. As has the relevant quango, the Carbon Trust. The “wholly owned subsidiary” department seems impervious.

Of course, eventually what will happen is that the European Commission will issue infraction procedures for non-compliance. If the obduracy continues, ministers will end up being dragged through the European court system, and made to comply. But all that takes time, often many years. In the interim, SMEs will continue to be denied genuinely helpful information. And far more energy will be consumed, and money spent, than necessary.

How much better were the Business Department to choose to look after the interests of the majority of UK businesses. And not just the handful of energy companies that apparently have the ear of its civil servants.

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