Utility Week

Customers VULNERABLE CUSTOMERS 26 | 15TH - 21ST JUNE 2018 | UTILITY WEEK Part 2: regulation What it is: Launched in February by Energy UK, the commission is independently chaired and comprises representatives from across the busi- ness, charity and consumer advice communities. Its remit is to explore how standards of care and support can be improved, and it aims to address the range of challenges vulnerable customers pre- sent to the industry. It will consider how different aspects of vulnerability (including mental health, financial vulnerability and disability) affect a customer's abil- ity to engage with the energy market, and also examine how suppliers, government and Ofgem contribute to care and support for those in vulner- able situations. Where we are now: The commission will publish a call for evidence and hold a series of hearings to glean views from consumer groups. A subsequent Vulnerability Charter is scheduled to be released this year, designed to build on existing voluntary commitments to support customers in need. When approached about the com- mission, Dan Alchin, head of retail policy, Energy UK, said: "We need to ensure there is greater progress on data-sharing and that innovative ways of supporting vulnerable customers can be brought forward." What it is: In April 2017, domestic prepayment meter prices became subject to a safeguard tariff (or price cap). In February 2018 Ofgem extended this price protection to a further one million vulnerable customers receiving the warm Home Discount (WHD). Suppliers can charge less than the set level of the safeguard tariff, but not more. It doesn't cap the total cost of a bill, just the unit rate. The prepayment safeguard tariff is one of the remedies introduced fol- lowing the Competition and Markets Authority's (CMA's) investigation into the energy markets. It is temporary and due to expire at the end of 2020 when the smart meter rollout should be complete. This should not be confused with the wider price cap. In February, the government proposed legislation to cap prices for customers on standard variable and default tariffs, known as the default tariff cap. Where we are now: Ofgem has pro- vided price protection for five million vulnerable consumers, following the extension of the prepayment safeguard tariff, to cover one million vulnerable consumers in receipt of the WHD. In December 2017, the regulator consulted on extending these protec- tions to cover around an additional two million vulnerable customers in winter 2018/19 if the default tariff cap can't be introduced by then. As to the default tariff cap, the dra bill sets five tests for Ofgem to consider: protecting customers against high bills; giving suppliers incentives to become more efficient; ensur- ing companies can secure sufficient finance; enabling effective competition and providing incentives to switch. These objectives have been vari- ously been described as "in conflict with each other" and "possible, if challenging". Only time will tell. What it is: The existing act addresses policy issues relating to electronic communications infrastructure and services, and updates the conditions for and sentencing of criminal copy- right infringement. But in February the government announced it was seeking views on amending it to allow the sharing of information between public authorities and energy suppliers. This may mean energy companies will be able to better protect customers most at risk of fuel poverty, because details of customers who receive certain state benefits could be shared with energy companies to ensure they are transferred to the safeguard tariff set by Ofgem. Where we are now: The consultation received 38 formal responses and has now concluded. Most of them, which came from companies including Yorkshire Water, Scottish Power and Coop Energy, agreed that current information-shar- ing codes were clear and easy to under- stand, but also made suggestions on areas for improvement, which included clarifying whether the codes extend to information-sharing by private utility companies. One water industry representative said "to deliver the benefits of better services that are tailored to people's needs, it is likely that further levels of detail will need to be explored and potentially more detailed guidance provided." Following the consultation, responses will be analysed and the dra codes, statement of principles and regulations revised as necessary. When approached as to the current state of play, an Ofgem spokesperson said: "The statutory instrument is cur- rently before the House committee this week [w/c 4 June]. The next step is the debates, and my understanding is that the government is currently looking to agree the format and exact dates." The Department for Business, Energy and Industrial Strategy (BEIS) told Utility Week it is due to publish its consultation response "in due course". Regulations: what's in place now COMMISSION FOR CUSTOMERS IN VULNERABLE CIRCUMSTANCES DIGITAL ECONOMY ACT REFORMS THE SAFEGUARD TARIFF

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