CONCERN is growing across the isles that those who are building new homes will not be able to connect to the electricity supply as energy companies are increasingly refusing this vital service to people living in rural areas.
It appears that due to the deregulating of the energy market supply companies no longer make money from connecting new customers in rural parts of the country, despite the ever-increasing prices for electricity.
Northern Isles MP Alistair Carmichael and Orkney MSP Liam McArthur have this week been raising the alarm after housing developers in Orkney expressed their frustration that all relevant energy supply companies have refused to install energy meters.
Paul Leask of local housing association Hjaltland said he was concerned that connecting projects they are currently working on in Scalloway, Brae and Aith could prove difficult.
Carmichael has described a situation as “ridiculous” and has now written to the UK business secretary, the head of energy regulator Ofgem and the trade body Energy UK.
Ofgem, and with it the UK Government, came in for some severe criticism earlier this week from the UK Parliament’s business, energy and industrial strategy committee which found “systemic failure in regulation” allowing some energy supply businesses to “behave in an entirely unacceptable way”.
“Whatever their reasons, it is entirely ridiculous that vital new housing should sit vacant simply because energy suppliers are refusing en-masse to service them,” Carmichael said.
“This is a textbook example of market failure which demands action. The regulator and the government must step in – and step in now, before the coming winter period.
“No doubt the current uncertainty and volatility in the energy market is playing a role in the refusal to connect new homes. That is all the more reason, however, for the government to take the long-term view where suppliers will not.”
McArthur added that the problem was not just restricted to the Northern Isles, but was one that affected most rural areas and was indeed a national issue.
In a letter to the head of Ofgem Jonathan Brearley, the two Lib Dem politicians said: “This is a textbook example of market failure which demands action. The regulator and the government must step in – and step in now, before the coming winter period.
“Anecdotally I have been told that this is a growing problem not only in the Northern Isles but in other areas of the UK, perhaps exacerbated by rising volatility and uncertainty in the energy market.
“If such a situation is allowed to continue it will cause a dangerous and entirely unnecessary restriction on access to housing in the isles and elsewhere in the UK.”
Ofgem has been contacted with a request for a response to the letter.
Paul Leask meanwhile described the service Hjaltland Housing Association tenants were receiving from some their energy supply companies as “horrendous”, citing examples where customers had to wait six, nine or even 12 months get faulty meters fixed.
“I find it incredible that a company can refuse to install meters in a new building,” the head of investment and asset management added.
“We are in the process of letting 18 new houses, and we have been lucky to get meters into these 18 new houses, because it happened before this becoming a major issue when some of these utility companies started to make the decision that they were not taking on any new customers.”
And he said he was concerned about getting electricity supply connection for the schemes Hjaltland was working on at the moment, namely in Scalloway and Brae, but also in Aith – a new scheme the housing association hopes to get underway soon.
Leask said that in the past providing a new connection, installing a meter and supplying the electricity all lay in the hands of one company. That is no longer the case.
Today network operator SSEN installs the cable and the main fuse and a cut out switch to a new house and then it leaves. The supply company, either one of the ‘big six’ or a smaller one, will then install a meter and charge for the electricity supplied.
“And that’s where the system falls down,” Leask said, adding that the system needed to be changed back to what it used to be to allow the network operator, in this case SSEN, to also install the meter so that an electricity supply can be guaranteed.
“If this problem isn’t sorted, we could be in a similar situation than Orkney Builders where we got house pretty much ready to let and we cannot let them because there are no metres in them,” he added.
“It is absolutely crazy that we are in a position where electricity supply company refuse to put metres in because they don’t want any new customers.”
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