Ofgem warns suppliers ‘not to repeat’ Warm Home Discount infringements

Ofgem has marked the Warm Home Discount scheme “very successful” in the last year, despite having to warn suppliers that infringements must not be repeated.

In its Warm Home Discount (WHD) annual report Ofgem noted that the scheme had suffered “minor problems” with delivery. It warned that it “does not expect to see these infringements repeated”, after it identified a few minor contraventions of the regulations from two suppliers.

Overall, the regulator concluded that participating suppliers in 2015-16 have generally delivered the scheme successfully and contraventions from EDF and Npower were limited to less than 0.2 per cent of rebates provided to customers. These infringements relate to not providing support to a customer or customers in an efficient way.

The report also found that participants of the scheme met the overall spending obligations for year 5, providing over £320 million of support to vulnerable customers. Low income pensioners received over £1.35 million in rebates of £140 each and nearly 95 per cent of these rebates were provided to customers who were automatically identified through joint working by suppliers and the Department for Work and Pensions. Ofgem also highlighted that suppliers funded around £14.7 million of other industry initiative activities to support consumers, including energy advice and help to manage debts.  

Ofgem E-Serve managing director Chris Poulton said that he was “delighted” that for the first time, suppliers have voluntarily chosen to participate in the scheme to support their customers – bringing the total number of participants up to 15. Bristol Energy, GB Energy Supply and Our Power will participate in one element of the scheme, delivering rebates to their customers in receipt of Pension Credit Guarantee.

The scheme is expected to evolve over the next two years with a cap of £15 million being introduced on Industry Initiative spending that can be used to write off consumer debts which have built up over time – reducing to £12 million the following year (year 7). The targeting methods used to identify eligible customers and allow more innovation in the ways that suppliers can support their customers are also expected to improve.

The Department for Business, Energy and Industrial Strategy (BEIS) has proposed aligning part of the Energy Company Obligation (Eco) with some of the eligibility criterion for WHD. Ofgem said: “We encourage suppliers to consider how they can make this as simple as possible for consumers to access both schemes.”

The WHD scheme was launched in 2011 to provide £1.13 billion over four years for financial support to consumers in need of help paying their energy bills. The government extended the scheme until at least March 2021, as part of its Fuel Poverty Strategy.