Fuel Poverty Action responds to CMA price cap remedy

Fuel Poverty Action has delivered its response to the Competition and Markets Authority price cap for prepayment meter customers.

The charity is campaigning for the level of the cap to be changed, calling the current cap a “partial remedy”.

Fuel Poverty Action have argued that the Competition and Markets Authority (CMA) remedy to cap prices for prepayment customers until the full smart meter rollout is complete, will still leave the fuel poor “in the cold”. It delivered its response in a dolls cap to the offices of the competition watchdog and will also send their letter to Theresa May and business secretary Greg Clark.

Fuel Poverty Action said: “The proposed cap still leaves the poorest energy customers paying over £200 more than their better off neighbours – a tax on poverty. Prepayment meter customers typically pay £300 more. This would reduce that figure by just £75. If the discrimination against prepayment customers is ‘unacceptable’, why is it being maintained?”

The response, which has been endorsed by Plymouth Energy Community and three London green parties, claimed that even after the cap comes into play suppliers will profit £160 per year for each prepayment customer.

The group also suggested that the CMA is “more concerned about promoting competition than they are about people dying”.

The CMA told Utility Week in response to the group: “The cap is in recognition of the particular difficulties prepayment customers face and will reduce bills by £300 million a year. An average annual saving of £75 on energy bills will be welcome for hard pressed households.

“We have set the cap at a level that will deliver significant savings whilst not putting companies off from supplying them at all – which would make things worse for such customers.  

“Prepayment accounts are more expensive to operate and leave customers with fewer option to switch. That’s why we will keep the cap in place until the introduction of smart meters removes these problems and have urged those involved to press ahead with the rollout.”

Last month, the CMA announced it would consult on the price cap remedy and invited responses to its proposal by 11 November. The remedy came from its two-year investigation of the energy market as part of a raft of remedies to increase competition and engagement for consumers.