APPENDIX 6
Paper by Energy Action Scotland
ENERGY ACTION SCOTLAND RESPONSE TO THE JOINT
OFGEM—ENERGY RETAIL ASSOCIATION CONSULTATION PAPER: A STRATEGY
TO DEFINE AND PREVENT THE DISCONNECTION OF VULNERABLE CUSTOMERS
1. BACKGROUND
1.1 Energy Action Scotland (EAS) is the
charity whose mission is to end fuel poverty in Scotland. EAS
has campaigned on the issue of fuel poverty and has delivered
many practical and research projects to tackle the problems of
cold, damp and expensive to heat homes. EAS has worked with both
national and devolved administrations on energy efficiency programme
design and implementation. EAS is currently a member of the Scottish
Executive's Fuel Poverty Forum, chaired the forum's EEC sub group
and sat on the Scottish Executive's Central Heating Programme
Advisory Group. EAS welcomes this consultation paper and believes
this to be a positive step in further supporting fuel poor and
vulnerable households.
2. MAIN COMMENTS
3. DEFINITION
OF VULNERABLE
HOUSEHOLDS
3.1 EAS would wish to see the use of the
fuel poverty definition as stated on page one of the consultation
document but with some amendment. Therefore, EAS suggests the
following definition be used: "Households are considered
fuel poor if, in order to maintain a satisfactory heating regime,
they would need to spend 10% or more of their disposable income,
after housing costs, on all household fuel use. Vulnerable households
are households containing someone aged 60 or over or under 16,
or someone who has a long term disability or has a long term illness".
3.2 Therefore, a vulnerable customer, as
defined in the proposal, should be "A vulnerable customer
at risk from disconnection will be unable to safeguard his or
her welfare or the welfare of any children in the household and
will be in need of care and attention by reason of age or infirmity,
or suffering from a long term illness or mental disorder, or have
a long term disability. Alternatively they will be classed as
vulnerable if they would be required to spend 10% or more of their
disposable income to maintain a satisfactory heating regime within
the home to the benefit of their health."
4. DEALING WITH
VULNERABLE CUSTOMERS
4.1 EAS is in broad agreement with the suggestions
made in this section, however there is no mention of advice given
to the customer. If customers are to budget more effectively,
prevent debt or get the maximum energy use for the payments they
make, then the provision of good quality, tailor-made energy advice
which is delivered face to face is crucial. EAS would therefore
request that, prior to any attempt to fit a prepayment meter and
certainly prior to the customer being referred to social services,
energy advice is given. Where the customer refuses this and a
referral is made to social services, then social services should
have properly trained and qualified staff to provide that energy
advice on behalf of the supplier.
4.2 Fuel suppliers are already taking the
need to provide trained call centre staff as a serious customer
requirement. They should therefore wish to see the provision of
quality energy advice for their most vulnerable customers who
are on the verge of disconnection. At the same time as energy
advice is being provided, the offer of measures to reduce fuel
use should also be made as a further means of assistance. Suppliers
have the facilities to do so via their EEC programmes.
5. THE DATA
PROTECTION ACT—GUIDANCE
5.1 Again EAS is in broad agreement with
this section but would comment that, rather than suggest that
"it may be possible to draw up a guidance note", there
should be a requirement for all suppliers to have a guidance note
for use by suitably trained staff as a first point of reference
in any case where disconnection is being considered.
6. THE PROPOSED
MODEL FOR
VULNERABLE CUSTOMER
SAFETY NET
6.1 EAS is also in broad agreement with
the proposals set out in this section to provide a safety net
for vulnerable customers. However, EAS would again wish to see
the use of effective energy advice and practical measures to support
these vulnerable customers. EAS would suggest that the model should
be amended to show the following:
6.2 Identification of Vulnerable Customer:
— Capture of all available information.
— Seek debt management solutions, offer
energy advice and practical measures via EEC.
— Discuss options with customer, face
to face wherever possible.
6.3 Where disconnection is a consideration,
contact social services, to alert them of a vulnerable customer
at risk of disconnection.
7. THE RIGHT
TO DISCONNECT
7.1 The right to disconnect is the ultimate
sanction for energy suppliers to use. While they will be reluctant
to lose this power EAS believes it to be outdated and that other
more effective means of ensuring customers pay for fuel could
be made available. The equivalent power was removed from the water
companies in England and Wales and this has not led to a massive
rise in the "can pay but won't pay" numbers. Access
to fuel for warmth, light and cooking is essential to the health
and welfare of all households' especially vulnerable families
and individuals.
7.2 A ban on disconnection from fuel supply
for vulnerable domestic customers would encourage companies to
develop alternative tariffs and payment methods that would enable
households to remain on supply, and the companies to recover arrears
and collect payment for current consumption, eg greater use of
Fuel Direct. Albeit the Fuel Direct system would require some
revision to ensure that this was offered as a mainstream payment
method rather than its current status as payment of last resort.
8. CONCLUSION
8.1 EAS welcomes the consultation on "Vulnerable
Customers" and welcomes the moves by the industry to have
a consistent and sympathetic approach to supporting vulnerable
customers. The changes suggested by EAS, ie to have energy efficiency
advice and practical measures applied to customers at risk, should
significantly reduce the number of vulnerable customers that could
face disconnection from supply.
8.2 Furthermore EAS is calling for an end
to all disconnections and the creation of new and more suitable
payment methods for vulnerable households.
8.3 These positive changes should also help
enable customers to manage both accrued debt and future energy
usage to prevent greater levels of fuel poverty or risk of fuel
poverty.
8.4 EAS would wish to see a review and monitoring
of these arrangements after a year of being introduced.
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