Utility Week

CHANGE IN TYPICAL BILLS DUE TO UPDATE TO TDCVs Customers UTILITY WEEK | 1ST - 7TH NOVEMBER 2019 | 23 Ofgem has published its updated Consumer Vulnerability Strategy 2025, detailing how it plans to deal with vulnerable customers over the next five years. In the first year, the regula- tor will focus on several areas, including creating an analytical framework to assess the impact of its policies on particular groups of vulnerable customers. Rules will be strengthened ENERGY Ofgem to strengthen rules to prevent self-disconnecting to protect customers from self- disconnecting their prepayment meters and there will be a pro- posal for gas networks to adhere to a vulnerability principle. Meanwhile, a consultation is planned on Ofgem's propos- als for the future energy retail market review and the "ability to pay" principles will be updated to provide targeted support to consumers facing payment dif- ficulties – this will be included in the licence conditions. The regulator will focus on five areas: • Improving identification of vulnerability and smart use of data; • Supporting those struggling with their bills; • Driving significant improve- ments in customer service for vulnerable groups; This week Household energy profiles to be updated Regulator plans to revise domestic consumption values to reflect decline in electricity usage Ofgem is proposing to update its standard consump- tion profiles for households to reflect continued falls in electricity usage. Typical domestic consumption values (TDCVs) are used to estimate bills, compare prices and assess the impact of regulatory decisions. The regulator is consulting on several amendments as part of a routine review. Values for gas usage will remain unchanged. Ofgem plans to raise its estimate of the proportion of electricity consumed during peak hours by households with an Economy 7 meter. The adjustments would lower the regulator's view of the typical dual-fuel energy bill for a medium-sized household paying by direct debit by £36 a year to around £1,142. Ofgem is not planning to update the benchmark consumption values used to calculate the price cap on default tariffs to keep them aligned with the TDCVs. It expects to introduce the new values from 1 April 2020 and has given stakeholders until 18 November 2019 to submit feedback. TG ENERGY Call for greater protections for microbusinesses Microbusinesses need more protections in the energy market and the government and Ofgem need to close the "gap" they face, Citizens Advice has warned. According to the charity, 1.5 million businesses are at greater risk of having their energy supply disconnected than the average domestic property, and of exploitation by "unscru- pulous" energy brokers. This is due to a lack of protec- tion for the microbusiness mar- ket, according to its latest report, Closing the Protection Gap. The report highlights the stark contrast between the way domestic customers are pro- tected compared with microbusi- nesses. For example, suppliers must exhaust all other options before disconnecting their domestic customers if they fall behind on payments. The same rules do not apply to microbusi- nesses, meaning their supply can be cut more quickly. Furthermore, energy brokers have been accused of pressuring microbusinesses into agreeing contracts. Gillian Guy, chief execu- tive of Citizens Advice, said: "Microbusinesses should not face the prospect of being cut off or ripped off because of a lack of consumer protections. The regulator, industry and govern- ment need to do more to close this protection gap." ENERGY Targeted charging review reforms should be ditched Ofgem should abandon the targeted charging review reforms to schemes that support the deployment of flexible energy technologies, a report by the Renewable Energy Association (REA) has said. The Flexible Futures report, co-authored by ElectraLink, said the reforms were "damaging" and Ofgem should prioritise flexibility. The Targeted Charging Review (TCR): Significant Code Review (SCR) was launched in August 2017 and assesses how residual network charges should be set and recovered in Britain. However, Dr Nina Skorupska, chief executive of the REA, said: "Ofgem's proposed targeted charging review reforms will undermine the deployment of flexible energy technologies and require urgent review. To meet our net-zero targets, Ofgem must have decarbonisation as part of its mandate." Data published in the report shows that electricity exported to the distribution networks doubled to 45TWh between 2012 and 2018, with growth largely from "variable" sources. In total, 39.8TWh of the 45TWh is from renewable sources, ranging from wind to waste-to-energy. The report said government cuts in 2017 and 2018 "greatly slowed" the growth in exports. Exports from fossil fuels have grown since 2016. • Encouraging positive and inclusive innovation; • Working with partners to tackle issues that cut across multiple sectors. Each theme is underpinned by the desired outcomes. For exam- ple, to support those struggling with bills, Ofgem wants to see better support for consumers at risk of self-disconnecting and a reduction in self-disconnections. kWh Current TDCVs Revised TDCVs Difference in the typical bill Gas Low Medium High 8,000 12,000 17,000 8,000 12,000 17,000 – – – Electricity: Profile Class 1 Low Medium High 1,900 3,100 4,600 1,800 2,900 4,300 -£18 -£36 -£54 Electricity: Profile Class 2 Low Medium High 2,500 4,200 7,100 2,400 4,200 7,100 -£14 £4 £8 Note: Profile Class 2 households consist predominantly of those with Economy 7 and Economy 10 meters

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