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Utility Week 10th January 2014

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Customers Analysis Faith and charity Kathy Oxtoby finds charities surprisingly supportive of energy suppliers despite their recent demonisation in Parliament and the national press. H ere is just a taster of some of the epithets hurled at the big six energy suppliers by politicians and the media following last year's announcement of increases in the price of electricity and gas: "greedy", "dishonest", and "a con". British Gas has since said that it will reduce the size of the increase by 3.2 per cent and other energy companies look set to follow suit in early 2014. But charities are concerned about the affect the price increases will have on vulnerable groups this winter, and the cost to their health if some of them have to choose between heating or eating. Mervyn Kohler, external affairs adviser for Age UK, says there are "significant health difficulties" for older people during winter months. "Older people are more vulnerable to the difficulties presented by cold weather, because they are not as fit and mobile as the younger population. Feeling cold and miserable while worrying about how to pay the next energy bill can also lead to self-neglect, social isolation and depression." For Macmillan Cancer Support any rise in energy prices presents a problem for those living with cancer. "People with cancer may feel the cold more because of their condition and may have higher fuel bills during their treatment. The stress of worrying about fuel bills can also have an impact on their mental health," says Alix Wooding, head of corporate partnerships at Macmillan Cancer Support. Faced with these emotionally charged issues at a time when many vulnerable groups are experiencing financial hardship, it might be tempting for charities to demonise utility companies for increasing their energy prices. But charities say they recognise that the big six should not "take the rap" for price hikes. "The energy companies are not solely responsible for the way in which global energy prices are going ever upwards – that's driven by the growth in international demand as well as the depletion of fossil fuel resources," says Kohler. He says the government has "put the spotlight on utilities" to tackle difficulties that Price rises announced by the big six CompanyDual fuel bill increase British Gas 6.0% EDF Energy 3.9% Eon3.7% Npower7.8% *Scottish Power 5.3% **SSE4.7% Average dual fuel bill £1,400 * Initial price rise of 8.6% will be tempered by a cut of 3.3% effective end of January ** Initial price rise of 8.2% will be tempered by a cut of 3.5% effective beginning of March vulnerable groups have paying energy bills. "Government has effectively outsourced all its efforts to help people in fuel poverty to energy companies and has passed the buck to them," he says. He believes the energy companies "are doing what they're told; the government is doing very little", and that Parliament should be leading more vigorously on upgrading the energy efficiency of housing stock to reduce energy consumption "to ease the inevitable anxiety from consumers whenever there's another round of price increases". Hugh Stickland, chief economist for Citizens Advice, suggests there has been a "ping pong blame game" between energy suppliers and the government, "which is not helpful to consumers who are dealing with double digit price rises". The government could also do more to support vulnerable groups with their energy bills by spelling out where it's going with its energy policy. "Some of these costs are a result of government policy and we need clarity about what people can expect from government," says Jenny Saunders, National Energy Action's chief executive. While recognising that many factors are involved in price hikes, charitable organisations suggest energy companies should be less focused on making profits and make it clear to customers why there are rises in energy prices. Says Saunders: "We've chosen successive governments that have put their faith in competitive markets as a means of supplying energy – an essential commodity – so we have to accept a certain profit level from these companies. But there is clearly a difference of opinion when it comes to the level of profit companies should be entitled to. Consumers are concerned about what they are asked to pay, for what seems to be unreasonable profits for energy companies at a time when individuals are facing hardship." The recent rise in energy prices could have been detrimental to relations between utilities and charities. However, both charities and utilities say relationships continue to be strong, and that they are still working together to support vulnerable groups. Age UK's Kohler says positive relationships between charities and energy companies are essential because by working together they can help each other to provide "information, offer reassurance and inspire trust and confidence in customers". "We've got to work with energy companies to make sure they treat older and more vulnerable people in a fair and effective way," he says. For instance, Macmillan Cancer Support has a strong relationship with Npower – its charity partner since 2004 – which is valued in excess of £6.4 million. The programme includes employee fundraising and a fuel management programme to help people living with cancer manage their fuel bills more effectively. EDF is also working in partnership with charities to support those who need help with their energy bills. For example, the organisation works with Plymouth Citizens Advice to offer free, independent debt advice to EDF Energy domestic customers. For charities, more co-operation from energy companies would help to get across messages about their concerns. "At Citizens Advice we deal with countless millions who are vulnerable to debt, including fuel poverty, and we would welcome working with any energy supplier to help those in debt," says Stickland. Kathy Oxtoby is a freelance journalist UTILITY WEEK | 10th - 16th January 2014 | 27

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