Utility Week

Customers UTILITY WEEK | 9TH - 15TH NOVEMBER 2018 | 25 Rates of fuel poverty remain disturbingly high, with too many households struggling to pay their bills because of low incomes, poor housing stand- ards and, in recent years, higher energy prices. These are the findings of a study carried out by the Univer- sity of East Anglia's Centre for Competition Policy, which says the current approach to tackling ENERGY Fuel poverty policy needs a 'reboot' because too many struggle fuel poverty is in need of a "reboot". The report, titled Fairness in Retail Energy Markets? Evidence from the UK, covers five broad themes, including: the long-term context for fairness in the retail energy market; the increasing complexity of the relationship between policymakers and insti- tutions; the way in which people purchase energy; the detailed experiences of those at risk of fuel poverty; and how data and statistics can be improved. The study identifies prob- lems with standard definitions of fuel poverty and emphasises the need for more work "on the ground" to help target house- holds in need of assistance. It recommends a much greater role for community groups and other local intermediaries who This week Ofgem confirms level of energy price cap The long-awaited price cap was set at just £1 higher than that initially proposed Ofgem on 6 November set the final level of the incom- ing energy price cap at £1,137, which is just £1 higher than the proposed amount. The regulator said the cap will come into effect on 1 January. The cap was subject to the statutory consultation process aer the £1,136 price was first revealed on 6 September. Following the announcement, Ofgem chief executive Dermot Nolan said: "From 1 January the energy price cap will put an end to customers on default tariffs being over- charged as much as £1 billion for their gas and electricity. "The price cap will ensure that whether energy costs rise or fall suppliers are not feathering their nest and changes in energy prices will reflect the underlying costs to heat and light our homes. The cap will be set at £1,137 a year for a typical dual fuel customer paying by direct debit. When it is intro- duced suppliers will have to cut their prices to at or below the level of the cap. Ofgem said "wholesale costs have risen significantly over the last year" and warned that if this trend con- tinues, it is likely that in February the regulator will announce an increase in the level of the cap to take effect in April. According to Ofgem, 11 million households on poor value default tariffs are set to save around £76 on average, while a typical consumer on the most expensive tariffs would save more than £120. The exact savings each individual household will make depends on the price of their current deal, how much energy they use, whether they have both gas and electricity and how they pay for their energy. AJ ENERGY Landlords to pay more for energy inefficient homes The government has increased the amount private landlords will be expected to pay to bring energy inefficient properties up to scratch. Under minimum energy effi- ciency standards (MEES), which took effect in April 2018, private landlords are required to ensure their properties meet energy per- formance certificate (EPC) band E when let out. In a consultation paper issued last December, the Department for Business, Energy and Industrial Strategy (BEIS) proposed that landlords should have to pay a maximum of £2,500 to bring sub-standard properties up to scratch, spark- ing criticism by fuel poverty campaigners. In the final version of the rules, which will have to be rubber-stamped by parliament, the government has said this cap will be increased to £3,500. Landlords will also be exempted from paying for the energy efficiency improvement upgrade – expected to cost an average of £1,200 per property – if they can provide evidence from three installers that the necessary works cannot be car- ried out for less than £3,500. The government estimates that raising the cap will enable 48 per cent of private rented EPC F and G rated properties to be improved to EPC E, as opposed to 32 per cent if the lower level had been allowed. It says there are around 290,000 domestic private rented properties in England and Wales with an EPC rating of band F and G, of which 45 per cent are occupied by fuel-poor house- holds. ENERGY Npower must take part in switch trial Energy regulator Ofgem has said it intends to confirm a provi- sional order on big six supplier Npower requiring it to "fully co- operate" in the latest simplified collective switch trial. Ofgem issued the provisional order on 24 September aer Npower had "refused to fully comply". Suppliers are required to take part in Ofgem's programme of consumer engagement trials, which are testing ways to help those on more expensive default deals to save money through switching, the regulator said. The trial of 100,000 Npower customers is now under way and confirmation of the provisional order will ensure that Npower "fully co-operates in all aspects of the trial." This includes process- ing switches by its customers involved in the trial, weekly reporting on progress and pro- viding Ofgem with results. An Npower spokesperson said: "Npower is complying with the terms of the provisional order and will continue to do so." Eleven million customers set to benefit have the necessary knowledge and trust. "We suggest that the current approach to analysing fuel poverty, and associated policy- making, would benefit from a reboot," the report states. The study also outlines issues around the data available to policymakers and how this can negatively affect customers, par- ticularly those on low incomes.

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