Energy sector offers helping hand
Energy suppliers are making fresh commitments to support domestic customers worried about paying bills over the winter months.
26 suppliers, covering over 90% of domestic customers, have signed up to fresh commitments, which have been drawn up with Ofgem. These include pledges to increase awareness of the help available and make it easier for domestic customers in financial difficulties to get in touch across different contact channels; to help ensure bill accuracy; and to step up smart meter installations for prepayment customers (such upgrades having proved invaluable for such customers who otherwise risked going off-supply during lockdown).
Suppliers will also take part in a public awareness campaign this winter to make sure more energy consumers know their rights and get the support they need.
The fresh commitments complement existing obligations for licensed suppliers and build on additional measures to support customers in need agreed with the Government last year at the start of the pandemic. These include adjusted repayment plans and provision of emergency credit to keep prepayment meters topped up for customers adversely impacted by Covid-19.
Suppliers have provided hundreds of millions of pounds of financial support to customers during this period - with Ofgem stating that as many as a million customers a month have been on repayment plans or payment holidays, while emergency credit of up to £50 was used 1.5 million times by prepayment customers in both November and December last year.
At the start of this year, Energy UK’s Vulnerability Commitment, an agreement signed by suppliers covering nearly three quarters of the market, came into effect with signatories pledging to improve the quality and availability of support offered to customers in need – whether that be from financial difficulties, mental or physical health issues, or other events. Signatories will be independently assessed every year on how they have performed against these.
In addition, around £1 billion a year is already provided by suppliers to assist customers on low incomes – including through programmes like the Warm Home Discount (which includes an annual £140 rebate for eligible households and support for energy and debt saving advice services) and the Energy Companies Obligation (ECO) which funds energy efficiency improvements for households that can cut bills substantially.
Although the country has been emerging from lockdown measures, the pandemic and its consequences will be around for some time yet. With support measures like the furlough scheme being phased out, energy suppliers, Ofgem and the Government are acutely aware that some customers will be worried about bills this winter. Earlier this week, Ofgem chief executive Jonathan Brearley warned that with global prices for fossil fuels, especially gas, increasing at an unprecedented rate, the rise in wholesale costs will lead to a substantial increase in the level of the next price cap.
Energy UK’s chief executive, Emma Pinchbeck, said:
“It’s going to be a difficult winter for some of our customers who will be concerned about paying bills or keeping their meters topped up as they use more energy over the winter months.
“We know customers aren’t always aware of what support is available or can be hesitant to seek help. So as well as showing their continued commitment to doing all they can to support those in need, suppliers are trying to get the message across that help is available - and to make it as easy as possible to access it. We will continue this work with suppliers over the autumn to try and make sure this message hits home over the autumn and winter.”
Ofgem’s Chief Executive, Jonathan Brearley, said:
“I know that many families are suffering the economic impact of Covid-19 and that energy bills are on the rise.
“Ofgem has worked closely with the industry throughout the pandemic, to do everything we can to make sure that customers are protected, especially those who need it most.
“We welcome today’s commitment made by suppliers to step in, starting ahead of winter, and give the support needed to families who are struggling to pay their bills.”
Minister of State for Energy, Anne-Marie Trevelyan said:
"It is welcome that energy suppliers are building on last year’s voluntary agreement, brokered by government, to support customers who may be experiencing financial difficulties.
“Customers should speak to their supplier if they are in financial difficulty, check that they are on a good value tariff and should also shop around for cheaper deals on the market. They can also benefit from our package of financial support for families and businesses affected by Covid19, which has been amongst the most generous in the world.”
Notes to Editors
- Signatories to the voluntary winter commitments are: AMPower, British Gas, Bulb, E, Ecotricity, EDF, E.ON, ESB Energy, Good Energy, Green, Igloo Energy, Octopus, Orbit Energy, Outfox the Market, Ovo, People’s Energy, PFP Energy, Pure Planet, Shell Energy, Scottish Power, So Energy, Social Energy, Together Energy, Utilita, Utility Warehouse and Zebra Power.
- Energy UK is the trade association for the energy industry with over 100 members spanning every aspect of the energy sector – from established FTSE 100 companies right through to new, growing suppliers and generators, which now make up over half of our membership. We represent the diverse nature of the UK’s energy industry with our members delivering over 80% of both the UK’s power generation and energy supply for the 28 million UK homes as well as businesses. The energy industry invests £13bn annually, delivers £31bn in gross value added on top of the £95bn in economic activity through its supply chain and interaction with other sectors, and supports 738,000 jobs in every corner of the country.