Category Archives: Energy

Citizens Advice publishes best practice guide for energy suppliers

On 18 January Citizens Advice published the findings of its research looking at how energy suppliers could effectively signpost and refer vulnerable customers to third parties, such as debt advice and support services.

The research found that fewer than 1 in 4 consumers believe that their energy supplier had ever offered them help and support, with fewer than one in ten being able to recall being signposted or referred to a third party organisation.
The best practice guide is designed to help energy suppliers signpost and refer vulnerable consumers to the right source of help.

#esanevent stimulates debate on consumer voice

On Wednesday 2 November, 18 speakers and 92 delegates came together at the iconic BT Tower for the ESAN Conference: How can the consumer voice be better heard in the regulation of essential services?  “Fantastic speakers, great content, excellently chaired”   #esanevent
Earth Hour

Ofgem seeks insights for future regulation

Ofgem-standard-picOfgem is to begin a new process of horizon scanning. It wants to better understand what is driving system change, the likely impacts on consumers and the implications for regulation. This information will help it set priorities for the evolution of regulatory arrangements. Ofgem has issued an open letter, explaining how to get involved, asking stakeholders to register their interest at energy.futures@ofgem.gov.uk.

UKRN launches leaflet for vulnerable consumers seeking support services

ukrnThe UK Regulators’ Network has today launched an advisory leaflet to help ensure vulnerable consumers get the help they need to access essential services.

Produced through a collaborative effort between Ofgem, Ofcom, Ofwat, the ORR and the CAA, the leaflet highlights a range of free support services offered by utility, telecommunications and public transport providers.

The UKRN website gives details of how to get braille, audio and large print versions of the leaflet.

Ofgem proposals for prepay customers

OfgemOfgem’s consultation on proposals to improve outcomes for prepayment customers ends 25 February 2016.

The proposals are designed to:

  • help PPM customers to access more competitive tariffs
  • address the costs consumers can face, ensuring these do not fall disproportionately on those least able to afford them, and
  • ensure that PPM customers are treated fairly by their energy providers.

Priority Services for energy consumers

On 17 December 2015, Ofgem published its final proposals for the Priority Services Register, considered integral to its consumer vulnerability strategy. The aim is to ensure that existing services relating to safety, access and communication in the energy market meet the needs of consumers in vulnerable situations.

Priority Services Register Review – Final Proposals

The consultation closes on 18 February 2016.

Ofgem consults on Priority Services

A gas ring burns on a ring at a home in west London, Tuesday, AuOfgem is reviewing its work on priority services.

 

Consultation closes 22nd September 2014.  Read more here.

 

Ofgem says:

Gas and electricity are essential services. Providing extra services to people who need them to access the market and stay safe remain critically important. This consultation seeks views on proposals that require suppliers, electricity distribution network operators and gas distribution networks to:

•provide additional non-financial services to energy consumers who are more likely than a typical consumer to experience problems with communication, safety and supply;

•take reasonable steps to identify people who would benefit from these services;

•share consumer information with each other and other utility companies, using vulnerability indicators agreed between them;

•raise awareness of services, including developing a single cross-industry brand; and

•conduct annual independent audits of their performance and publish findings yearly

Ofgem reports fall in price differences between payment methods

Electric_kettle-1-editedOfgem has analysed differences in price between different payment methods used by consumers following an information request to suppliers in February 2014.  It has found that the gap between prepayment and direct debit has narrowed since 2009.  Read more here.

Background

Ofgem rules allow suppliers to charge different prices for different payment methods, but only if the amount reflects the cost of providing those accounts. Some larger suppliers do spread some of the costs of prepayment customers among the whole of their customer base. This is consistent with regulations and guidance, which allow for differences. These result in reduced price differences for vulnerable customers, who often do not have the option of alternative payment methods. Suppliers can also charge the same price regardless of payment method, so they can spread the costs they incur across all customers. However, the majority of consumers pay by direct debit (including half of all fuel-poor households) so any change would mean these consumers would pay more.

Findings

Customers who use prepayment meters are now charged around £80 a year more on average compared with direct debit customers for dual fuel. This is a significant fall as the difference was almost £140 in 2009. Ofgem is satisfied that across the market the price on different payment methods reflects the varying costs suppliers face in providing them. The price difference for quarterly payment compared to direct debit has remained at around £80 since 2009.

E.ON fine

Energy-picFollowing an investigation E.ON has agreed to pay £12m to vulnerable customers, after Ofgem found it had broken energy sales rules. E.ON has also committed to compensating any customer that it missold to, including automatic payments to some vulnerable customers.

Read more from Ofgem here.

The agreed redress package reflects the harm caused by E.ON’s extensive poor sales practices carried out between June 2010 and December 2013.

As part of this package E.ON has agreed to:

•Pay around £35 to 333,000 of their customers who are normally recipients of the Warm Home Discount. This redress package will benefit pensioners, disabled and low income families

•Additionally, make automatic payments to some vulnerable customers who may have been affected by E.ON’s poor sales practices

•Set up a dedicated hotline 0800 0568 497 and compensate all consumers that it missold to

•Write to around 465,000 customers it has identified through its redress work, informing them of how to get in touch to find out whether they were missold to.

Ofgem reports on Time of Use tariffs

As part of the Smarter Markets Programme, Ofgem commissioned the Centre for Sustainable Energy (CSE) to undertake analysis of domestic electricity use patterns and to model the potential distributional impacts of time of use (ToU) tariffs (energy tariffs with different prices at different times).

Ofgem has published CSEs report – see hereA gas ring burns on a ring at a home in west London, Tuesday, Au for more. The tariff modelling undertaken by CSE demonstrates the potential impacts of a ToU tariff on different consumers’ bills. It shows that the types of customers that benefit from ToU tariffs will depend on their current usage as well as how they respond and the types of ToU tariffs on offer.

The publication of this research represents a first step in seeking to understand how ToU tariffs may impact on different customers. Ofgem envisage undertaking further distributional analysis as they make progress towards specific policy decisions as part of the individual projects under the Smarter Markets Programme.