Enter CORPORATE RESPONSIBILITY PERFORMANCE REVIEW 2012 INTRODUCTION – Chief Executive’s Introduction 2 Chief Executive’s Introduction 3 Review of 2012 3 Energy challenge 4 INTRODUCTION The future landscape 4 We must evolve with the changing energy landscape York Gas Storage Terminal, East Yorkshire, UK INTRODUCTION – Chief Executive’s Introduction 3 other major suppliers. By contrast, gas prices increases in customer satisfaction – as measured have fallen and bills have reduced in North by our Net Promoter Scores – in both the UK and America, helping customer satisfaction rise for North America. British Gas took the lead in Direct Energy. Our efforts there have focused simplifying energy tariffs and we were awarded £14.1bn on expanding into new markets and integrating five stars by the consumer campaign group newly acquired businesses into our operations. Which? for the clarity of our new energy bills that allow customers to ensure they are on the right contribution We invested more than £2bn in 2012 to tariff. We also improved our complaints secure new sources of energy for the UK, processes by making it easier for customers to across both gas and power. Sustained let us know if they have any concerns. Despite Centrica’s UK activities in investment in energy projects makes a large these improvements, the tough economic climate 2012 supported 174,000 contribution to the communities in which we and concerns over rising fuel bills have damaged UK jobs and made a operate: a study by the economic forecasting public trust in the energy industry in the UK, and £14.1bn contribution to consultancy, Oxford Economics, calculated in British Gas in particular, as the nation’s largest the UK, equivalent to the that Centrica’s UK activities in 2012 supported energy supplier. We are highly aware of the work CHIEF 174,000 UK jobs and made a £14.1bn that remains to be done in this area. size of the economy of contribution to the UK, equivalent to the size of Manchester. EXECUTIVE’S the economy of Manchester. With energy costs increasing in the UK, keeping energy affordable is paramount as we seek to INTRODUCTION We undertook all our activity with a clear focus on deliver value for our customers. Rising wholesale safety. There were no significant process safety energy costs and levies to fund investment in Thanks to the hard work and events* in our oil, gas and power generation low carbon programmes led to price increases dedication of our people we again operations, and our overall lost time injury in 2012, but a focus on cost management delivered a solid performance in frequency rate declined for the sixth consecutive across our businesses meant British Gas was 2012, making considerable progress year, falling to 0.20* per 100,000 hours worked, still able to offer the lowest tariff increase of the towards our strategic goals despite beating our target of 0.225 for 2012. six major UK energy providers. In the US, where operating in what has continued to be the proliferation of natural gas from shale has In 2012, we continued to support our most reduced wholesale energy prices, we focused a challenging economic environment. vulnerable customers and spent more than on helping customers manage their energy £223m providing assistance such as free debt costs through a number of initiatives, including Review of 2012 and payment assistance, discounted tariffs and time-of-use tariffs. In the UK, higher commodity and non- energy and household grants to more than 2.1m* commodity costs alongside much colder households. In North America, we continued to We recognise that this is a tough time for weather compared to the very mild 2011, support bill payment assistance programmes for stretched household budgets. Our focus on contributed to higher bills for our customers. our customers in Texas and contributed more helping customers cut their energy We recognise the real challenges that this than $534,000 (£336,000) to the programme, consumption has helped many to limit the presents in an environment where disposable assisting more than 2,600 customers. impact of rising prices through measures such income is flat for many of our customers. as loft and cavity wall insulation. British Gas * Assured by Deloitte LLP for 2012 reporting, Responding to this, although we were obliged Customer trust remains a top priority. The was the first UK energy company to offer free see website for more information. to increase bills as a result of higher input changes we have made in 2012 to improve our insulation to all customers, and in 2012 prices, our increase was lower than all the customers’ experience have helped us achieve insulated approximately 670,000 homes, INTRODUCTION – Chief Executive’s Introduction 4 which we estimate has had the same impact applying our expertise in energy efficiency and company able to address the challenges of the on CO2 emissions as replacing a coal-fired smart energy management to help our energy trilemma. Therefore, in February 2013 power station with low carbon generation. customers reduce their energy consumption, we refreshed our corporate strategy, setting as well as working to minimise the impact from out three key aims: Consumers must have Throughout 2012, we introduced innovations our upstream generation activities. the energy they need to that helped customers to better manage their Innovating to drive growth and power and heat their energy use. In the UK, British Gas launched The future landscape service excellence homes and businesses. Remote Heating ControlTM, which enables The energy challenge changes as the energy This energy must be customers to control their central heating from a landscape shifts. The UK now imports the Integrating our natural gas business, affordable and those smartphone via a broadband connection. Smart majority of its gas, and while residential gas linked to our core markets meters offer further opportunities for innovation, consumption is declining year-on-year due to who struggle to pay and British Gas continues to lead their energy efficiency programmes, the Increasing our returns through efficiency may need support. deployment in the UK, having installed more than dependence on this form of energy will and capital discipline. On top of this, society 800,000* in customers’ homes and businesses continue for many years ahead. Gas heats must move towards a by the end of 2012. In North America, smart more than 80% of UK homes at half the cost of You can find out more about the strategy in our low carbon future. meters, which have been fully rolled out in some electricity, and contributes more overall energy 2012 Annual Report and Accounts. of our markets, are enabling Direct Energy to than other fuels combined when industrial provide customers with more flexible electricity processes are included. In North America, an We are now reviewing and adapting our plans. These are also helping our customers to increasingly abundant and reliable supply of corporate responsibility approach to further cut energy costs and reduce carbon by lowering natural gas from shale creates potential for the strengthen our new strategic framework’s ability demand on the grid at peak times. region to export gas to the rest of the world to balance the demands of the energy trilemma. including the UK. Energy challenge We will update you on our new corporate Consumers must have the energy they need to Renewable energy such as offshore wind offers responsibility strategy in the coming months power and heat their homes and businesses. good alternatives for meeting low carbon via our website and social media. I welcome This energy must be affordable and those who targets. However, costs have not decreased to your thoughts. Please get in touch at struggle to pay may need support. On top of this, the levels many hoped they would and projects [email protected]. society must move towards a low carbon future. continue to get larger and more complex. Combined with regulatory uncertainty and Being a responsible energy company is about financial constraints, the reality with renewable balancing these three, often conflicting, generation is a much different one than we demands: what we call the energy trilemma. were looking at three years ago. While Centrica has a vital role to play in this. renewable power will fill some of the gaps left by the closure of coal-fired power stations in Increasing supplies of gas will help us offer the UK over the next decade, gas-fired power Sam Laidlaw affordable energy. Through our exploration, generation will become an increasingly Chief Executive production and trading capabilities, we are important part of the fuel mix. 1 May 2013 * Assured by Deloitte LLP for 2012 reporting securing the gas our customers need, helping with limitation of scope, see website for to achieve energy security. And we are We must evolve with the changing energy more information. contributing towards a low carbon future by landscape if we are to be a sustainable CUSTOMER FAIRNESS 5 At a glance 6 Overview 7 CUSTOMER Clear communications 7 Clear billing 7 Energy pricing 8 FAIRNESS Listening to customers 9 Customer service 9 Customer satisfaction 9 Feature 10 An update from the British Gas Customer Board 10 Complaints 11 Supporting vulnerable customers 11 North America 11 UK 11 Case study: Warm Home Discount 12 Delivering mandatory programmes 13 Working with charity partners in the UK 13 Helping customers 5 star rating manage energy costs 14 Which? awarded British Gas five stars for the clarity of the new bills Employee at British Gas Energy Contact Centre, Cardiff, UK CUSTOMER FAIRNESS – At a glance 6 CUSTOMER FAIRNESS We are now finding that using EnergySmart we are saving AT A GLANCE quite a bit more money on our electric bill and also on our gas bill…in the region of about £110 perhaps a year.