Utility Week

Customers UTILITY WEEK | 22ND - 28TH JUNE 2018 | 25 A round one in seven households in the UK have a prepay meter, and recent research from Citizens Advice shows that being unable to top up and self-disconnecting is a regular occurrence for 1.9 million people. Self-disconnecting from pre- pay gas and electric hits vul- nerable people the hardest, according to the study. It found vulnerable customers are more likely to disconnect from their prepay meter, which can then have a negative impact on their physical and mental health. In 2014, Citizens Advice found 15 per cent of prepay meter users had self-disconnected. The 2017 figure is the same, showing there's been little progress on the issue in the past three years. It's even more likely that people will be forced to self-dis- connect when they need it most, such as during periods of par- ticularly cold weather, because they will be using more energy and will be unable to afford to top up. The study also found peo- ple who self-disconnect are less likely to seek help. Of those people who self-disconnected, it found 17 per cent felt ashamed, and 12 per cent felt depressed. One in five people who dis- connect (21 per cent) do so because they can't afford to top up (around 320,000 people); 120,000 are waiting for their benefits. Debt on a prepay meter is also a key issue. Forty per cent of people with debt on a prepay meter self-disconnected (versus 13 per cent without debt). Consumers in that situation are stuck, because any additional money added goes towards paying the debt on the meter but won't get the heating or lighting turned back on. This can be a rapid downhill spiral, with an ever-decreasing incentive to pay the mounting debt. The way forward The logical answer is communication, one of the key points being addressed by Energy UK's Commission for Customers in Vulnerable Circumstances. The results of this review are due to be presented to the industry and stakeholders "in due course". Citizens Advice suggests a priority for this work should be "to provide a clear and meaningful commitment to how suppliers will respond if someone asks for help. If Vulnerability Conference To tackle the issue of vulnerability head-on, Utility Week is hosting the Consumer Vulnerability Conference 2018, which will take place on 5 July in London. The aim of the event is to turn conversation into action for customers in vulnerable circumstances, through presentations and debates from key industry delegates, seminars and workshops. For more information and to book tickets visit: www.event. utilityweek.co.uk/vulnerability Prepayment meters Prepayment meters are widely perceived as beneficial to vulnerable customers, but evidence suggests that without appropriate communication and support, they not only have severe limitations but also present their own set of problems. under the price cap. If you are hard-nosed, it makes sense to only have those customers that are cheapest to serve: the savvy, agile well off, well-educated cus- tomers that give you the lowest cost base." Vaughan also told the event the cap risked holding back innovation when the retail market is being transformed by technological innovations that will enable suppliers to offer more differential pricing: "It feels like an analogue solution in a digital world." She said the SVT price cap must avoid the errors in the safeguard tariff, which she said include "ignoring" the costs of smart meter rollout. But even beyond the 7 December price cap, Victoria MacGregor, director of energy at Citizens Advice, says vulnerable customers might benefit from a more permanent solution: "It's essential that if the price cap is lied, protections for vulnerable customers remain in place," she says. "This could mean a permanent cap for people on low incomes, those with disabilities and elderly customers. It may also require new ways to identify these people to be implemented so they remain protected from high prices." Self-disconnection is defined as interruption to electricity or gas supply by people using prepay meters because the card or key has not been topped up and inserted into the meter. successful, this will provide reassurance to people that suppliers should be the first port of call if they're struggling to pay for their energy." In a report out this week Ofgem said the number of gas meter devices installed using a court warrant rose by 6.9 per cent last year, adding that too many suppliers are 'forcing' customers to use prepayment meters. It added meters should be "an absolute last resort" for recovering debt, and suppliers should be putting households onto repayment plans first. If the number of forced meter installations continue to rise, Ofgem said it would "take tough action". It also noted the number of homes being completely disconnected due to debt fell to just 17 in 2017. But Ofgem's Rob Salter-Church said energy companies "could do much more". "Protecting vulnerable customers is non-negotiable for suppliers," he added. The number of gas and electricity prepayment meters forcibly installed by warrant rose to 84,000, from 81,000 in 2016. Three suppliers - British Gas, Utility Warehouse and Ovo Energy – were singled out by Ofgem for installing a much higher proportion of meters per head than the industry average.

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