Scottish Power chief executive Keith Anderson has called the energy price cap an “irrelevance” that has only protected customers from “the reality of how much this stuff costs”.
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Utilita Energy has slammed Ofgem for opting to “name and shame” suppliers over their direct debit practices after a review by the regulator identified the prepayment meter specialist as one of a number of companies to have flaws with its procedures. A spokesperson for Utilita said it was “shocked and disappointed” that Ofgem had published its findings without waiting for suppliers to respond to a follow-up request for further information and evidence.
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Energy UK has urged the government to take further actions to reduce household energy bills after Cornwall Insight forecast the price cap to rise to nearly £3,400 over the winter. The energy industry trade body said this could include removing VAT from energy bills, moving policy levies onto general taxation and seeing whether other costs could be spread out over a longer period of time.
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Whoever wins the Conservative leadership race will face immediate pressure to deliver on the promise of more secure, affordable, green energy. Sue Ferns, of the Prospect union, insists that this must start with a clear delivery plan that provides certainty for investors, an expanded skills pipeline, and good green jobs.
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There is now “significant momentum” behind the idea of a social energy tariff, with cross-party support in Parliament and backing from multiple large suppliers, according to a senior figure at National Energy Action. Matt Copeland, head of policy at the fuel poverty charity, made the comments to Utility Week in response to the Business, Energy and Industrial Strategy Committee’s report into the energy retail market, which recommended that the government consider introducing a social tariff for the most vulnerable customers.
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The government has confirmed the details of how its £400 discount will be applied to household electricity bills over the autumn and winter. Households will receive a £66 discount in October and November, rising to £67 each month from December through to March 2023.
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Ofgem must hold energy companies to account to ensure they do not unnecessarily force customers who are struggling to pay their bills onto prepayment meters (PPMs). The Business, Energy and Industrial Strategy Committee issued the demand after being told by witnesses as part of its inquiry into the energy retail market that suppliers have been breaking rules over the treatment of indebted customers.
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The price cap on default tariffs has been predicted to rise to £3,420 in October and then £3,850 in January next year after wholesale gas and power prices hit new record highs on Tuesday (26 July). Based on typical consumption patterns, BFY said this would mean the average dual fuel consumer paying by direct debit would face a bill of more than £500 for January alone.
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Electricity switching remained heavily subdued in June, with the number of customers completing a change of supplier down 78% when compared to the same month last year, according to the latest figures from Energy UK. However, the figure was up slightly from May's record low.
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In its report following its inquiry into the energy retail market, the Business, Energy and Industrial Strategy Committee has urged ministers to implement a hedging strategy for Bulb, which was effectively nationalised last November when it entered the Special Administration Regime. The report made a string of recommendations to improve the retail sector including changes to way the costs of supplier failures are recovered.
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Costs incurred as a result of the Supplier of Last Resort (SoLR) process should be recovered through general taxation, Citizens Advice has argued. The consumer charity was writing in response to an Ofgem consultation on whether SoLR levy costs should continue to be recouped through domestic customers’ daily electricity standing charges or should instead be recovered on the basis of usage.
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The current market-wide price cap on energy tariffs should be replaced with a social tariff for the most vulnerable customers and a relative price cap for the rest of the market, the Business, Energy and Industry Strategy Committee has argued. In the meantime, the government must “immediately update” its support package for low-income households which is “no longer sufficient” for the price cap increase now expected in October.
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The government has said it is “keeping most options on the table” on wholesale market reform, including introducing locational pricing and having separate markets for firm and variable power. Other options to be considered as part of the Review of Electricity Market Arrangements include the evolution of, or alternatives to, the Contracts for Difference and Capacity Market, as well as an obligation on energy suppliers to directly procure green electricity.
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The Climate Change Committee puts the cost of transitioning the UK’s 29 million homes to net zero at £250bn. This represents an unprecedented opportunity for service providers involved in the energy infrastructure and the life cycle of a home.
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Energy suppliers, charities and Money Saving Expert founder Martin Lewis have pledged to work together on a series of measures aimed at supporting customers through this winter. These include developing a universal tool to help billpayers understand the support they could be due and where to access it. Suppliers have also agreed to explore opening up data on tariffs only available to existing customers and on how direct debit levels are set. It comes amid predictions the energy price cap could rise to £3,244 from October.
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