Utility Week

Customers VULNERABLE CUSTOMERS 26 | 22ND - 28TH JUNE 2018 | UTILITY WEEK Part 3: pricing V ulnerable customers, along with all other consumers, are helping to fund the £11 billion smart meter rollout, but they could also stand to miss out on its potential benefits. The rollout is understood to be an opportunity to engage directly with consumers, and suppliers generally acknowledge certain needs must be addressed. But the danger lies in vulnerable customers paying the price without reaping the benefits, pushing them further away from the Holy Grail of engagement. Furthermore, there is a risk that those who are not currently defined as vulnerable might be propelled over the edge by tariffs that favour those with smart technology. The problem is in part due to the significant variance in suppliers' plans to meet the additional needs of vulnerable consumers. There is no official definition of what extra help should be offered, in what form, and protections such as the Energy UK Safety Net are not applied by all suppliers. Also, the planned provision of services is not necessarily dependent on market share, although the level of preparedness is. In the first instance there are issues surrounding S ocial tariffs were introduced to help households in fuel poverty, those over 60 years of age, and those on means- tested benefits. The original idea was for these tariffs to match the cheapest available energy tariffs, with suppliers offering extra support for some customers, such as energy efficiency advice. But since 2015 suppliers have phased social tariffs out and moved anyone that was on them to the cheapest available tariff at the time, alongside qualifying for the Warm Home Discount (WHD). But as the much told story goes, this oen meant these customers automatically moved on to standard variable tariffs (SVTs) once the cheap tariff had run its allotted course. Furthermore, not all customers who qualify for social tariffs are able to get the WHD. That's not to say there aren't other ways and means of getting cheaper energy for vulnerable customers, such as the Energy Trust Fund from EDF (from which it draws funds to help its most vulnerable customers clear debt). There's also the Winter Fuel Payment (a payment of between £100 and £300, if you were born on or before 5 May 1953. Payments go out automatically between November and December); and the Cold Weather Payment (payment of £25 is made to the same qualifying Social tariffs Social tariffs are supposed to help those most in need, but in the energy sector they've become increasingly complicated, while in the water sector the help you receive can be determined by where in the country you live. people each week of very cold weather – zero degrees Celsius or below – between November and March). The government also offers energy efficiency grants. These fully or partially cover the cost of home improvements, such as installing lo or cavity wall insulation. But not all of those who once benefited from social tariffs qualify for any of these. A role to play Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline, says tariffs must play a role in mitigating vulnerability. "For some, the stability of knowing what service they receive from their existing supplier can be a reason not to switch. And for vulnerable customers, there are oen additional barriers to them engaging in the market. Greater protection is needed to ensure that all customers are able to access competitive tariffs." Meanwhile, over in the water sector social tariffs have been offered by all water companies since 2015, but are subject to something of a "postcode lottery", whereby the level of social tariff depends on other customers in the area's willingness to pay. The alternative would be a much discussed nationalised levy. What cannot be refuted with regard to social tariffs in the water sector is the need for consistency in processes and, as utilities programme manager at Coventry Citizens Advice Claire Differ suggested at Utility Week's Consumer Debt Conference in March, there should be a standardised tariff across all regions so that the level of support does not depend on where you live. The elephant in the room across the board is the question surrounding how responsive and effective these schemes are in either preventing or genuinely easing vulnerable circumstances. Do they work reactively (or in fact at all) in instances of temporary vulnerability (such as that experienced following a bereavement), for example? And if not, why not?

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