GUIDELINES ON GREEN SUPPLY OFFERINGSCONSULTATION
The following response is submitted on behalf
of London Electricity Group plc, which incorporates the supply
businesses of London Electricity, SWEB and Virgin Energy.
We welcome the opportunity to comment on Ofgem's
proposed guidelines applying to green supply offerings. Whilst
we are in broad agreement with the principle that Green Supply
offerings should be transparent and verifiable, we have reservations
about some of the prescriptive elements of the guidelines which
we believe will stifle innovation in the marketplace.
The section defining renewable technologies
is unnecessarily specific about individual renewable sources.
The paper correctly recognises that some sources have other environmental
benefits and the importance of customer perceptions is important
in relation to what is accepted as being renewable. This is the
very reason why Ofgem should not prescribe what sources are allowable
but should allow customers to choose between offerings depending
upon individual preference.
We believe the Guidelines should provide a customer
with the ability to consider different supply offerings whether
a premium is or is not included. The guidelines should ensure
that a supplier makes its offering as transparent as possible
and should not prevent a supplier utilising ROC's associated with
the energy backing the offering as long as this is clearly stated.
We believe that the Guidelines should refrain
from being unduly restrictive about what does or does not constitute
a "green supply offering", but should rely upon the
principles of verification and transparency to protect consumer
interests so maximising customer choice.
The role of verifying the marketing claims made
by competing supply companies will be vital if customers are to
have confidence in choosing green supply offerings. We believe
that Ofgem have a key role to play in ensuring that any independent
bodies who carry out verification services do so on the basis
of the guidelines. We do not believe that there is a requirement
for an accreditation role, as currently undertaken by Future Energy,
as any formal criteria would restrict the scope for suppliers
to offer customers innovative products.
London Electricity is currently conducting research
amongst our Green Tariff customers that will include seeking their
views on some of the issues raised in your paper. This work has
not yet concluded and therefore the results are not included in
Corporate Responsibility Manager
22 February 2002