First Report - Preparing for the winter

We were disappointed to learn that not all energy providers are required to offer this discount and that providers who do offer it have a limited number of discounts which are given on a first-come, first-served basis.

We recommend that, this winter, the Government works to extend the Warm Home Discount to low-income and fuel-poor households, especially giving consideration to those with disabilities and medical conditions. Discounts should not be based on a first come, first served basis.

We urge the Government and energy suppliers to consider implementing a form of social tariff and other measures to protect vulnerable households from being cut off from their energy supplies. We note the challenges vulnerable households can face in benefiting from the energy savings that more energy efficient homes and appliances can bring. We recommend that such a social tariff should also be accompanied with measures that enable energy efficiency improvements. In the longer term, the Government should streamline the various existing schemes into a more targeted form of support for the most vulnerable, especially over the winter months.

In its current form, the Cold Weather Payment is an outdated, old-fashioned scheme. The Government should revise the Cold Weather Payment as follows: to be applicable on a daily rate after a one- or three-day cold-wave below freezing; to be based on the daily minimum temperature and not on an average; and to be provided in advance of forecast cold events.

We recommend that the Government facilitate local authorities to share best practice in delivering the Household Support Fund so that all local authorities, especially those that are smaller and more rural, may learn from those who have delivered this funding effectively.

We recommend that Ofgem consider how it should mandate that all customers, and particularly vulnerable groups, get more time, better attention and continuity of support from their energy supplier.

We recommend that energy companies be required to provide, on request, a priority phoneline for trusted intermediaries, charities and consumer organisations to access support for their clients over the winter months. This should be implemented ahead of this winter.

We recommend that contact empathy be used as a measure of success in customer service provision by energy companies. This would help to rebuild trust in the sector.

While we welcome the forthcoming set of consumer standards, we are disappointed that Ofgem did not anticipate the need for significant improvements ahead of this winter. Introducing them from December 2023 will likely be too late to see significant 12 Preparing for the winter differences made this winter. We also believe that energy companies have not been sufficiently proactive in anticipating and exceeding the expectations of Ofgem and the public.

Ofgem and energy companies need to adopt a more proactive culture in improving industry consumer standards. Energy companies should not wait to be enforced to certain standards by Ofgem but should be innovating to improve customer satisfaction and attract more customers. We expect Ofgem to be quicker in challenging energy companies where they are failing to deliver quality customer service.

The current standing charge structure is unfair and regressive and penalises those on lower incomes or who are actively reducing their energy usage. The Government should engage with Ofgem to: • revise the standing charge model and replace it with a rising block tariff (also known as a consumption-based tariff) based on per unit cost, which would correlate costs with how much energy a household uses; • make clear to consumers the breakdown of the standing charge between network costs, operational costs and policy costs; and • remove operational costs from the standing charge, as these should be borne solely in consumer bills. Suitable mitigations should be adopted to ensure that high-need vulnerable groups are not penalised by the removal of a standing charge.

Smart meters are an important way of incentivising good energy use, providing consumers and companies with information that can help to lower a household’s consumption. Energy companies must accelerate the rollout of smart meters, possibly by offering financial incentives to customers or tying energy efficiency support with installation of a smart meter, with priority given to the fuel poor. (Paragraph 50) Preparing for the winter 13