Supplementary evidence from E.ON UK plc
ADDITIONAL NOTE
ON PREPAYMENT
METER (PPM) CHARGES
AND SOCIAL
TARIFFS
Prepayment meter charges
1. The question (Q862) asked companies to
confirm whether they charged prepaid meter customers around 17%
more than direct debit. There seemed to be some confusion around
the answers given, which it might be helpful to try to clarify.
2. This question was answered for our electricity
customers, who make up 63% of our prepayment meter customers,
where it was explained that, whilst the extra costs to serve such
customers were around £45, the additional amount charged
was around £35.[275]
3. The reasons for the apparent difference
between the question asked and the answers given are, first, that
the question looked only at final prices to customers, without
taking into account the extra costs to serve, and also whether
one looks at dual fuel, gas or electricity. Therefore, whilst
it is the case that, for E.ON's electricity customers, for example,
we are charging them less than the additional cost of that metering,
it is also the case that the total price charged to such customers
is 10% of the direct debit price higher than the amount charged
to direct debit customers. Comparable figures for gas and dual
fuel customers are given below—but again, these are the
"bare" figures, without taking into additional costs
to serve. The size of those costs is being looked at as part of
the work with Ofgem on PPM customers.
4. The percentage of our PPM customer base
represented by each category is also provided below, to show the
relative size of group covered.
| | Differential (ignoring costs
differences) as % of DD price
| % of PPM customers
in category
|
| Electricity | 10% |
63% |
| Gas | 16% | 8%
|
| Dual-fuel | 13% | 29%
|
| |
|
Social Tariffs
5. The question (Q889) was around the benefits of clarity
and transparency in terms of social tariffs. In our response we
supported that clarity, particularly if it led to fuel poverty
being tackled on a long-term sustainable basis. As is clear from
our response to Q888, we subscribe to a view that it is right
to stand back and take a long hard look at how we tackle fuel
poverty in this country, which process should be carried out in
an open and honest fashion, with clear direction from Government.
6. That remains our position and, indeed, it is essential
if we are really to tackle fuel poverty. However, we do not support
a mandatory social tariff—not least because we do not know
what it is that we are being asked to support. If the Committee
were minded to recommend a mandatory social tariff, it would need
to be clear what the proposal was, that it was costed, well-targeted
and sustainable and that the cross-subsidy from other customers
was recognised.
7 July 2008
275
This was rounded, it should be £38. Back
|
