Memorandum submitted on behalf of the
Government's Fuel Poverty Advisory Group for England (FPAG) (FP
12)
The Fuel Poverty Advisory Group is a non-departmental
advisory body, which consists of a chairman and senior representatives
from the energy industry, charities and consumer bodies. Each
member represents their organisation, but is expected to take
an impartial view. The role of the Group is to:
— Consider and report on the effectiveness
of current policies aiming to reduce fuel poverty;
— Consider and report on the case for greater
co-ordination;
— Identify barriers to reducing fuel poverty
and to developing effective partnerships and to propose solutions;
— Consider and report on any additional
policies needed to achieve the Government's targets; and
— Encourage key organisations to tackle
fuel poverty, and to consider and report on the results of work
to monitor fuel poverty.
1. Executive summary
1.1 Progress against Governments targets:
In 2004 there were 1.2 million households, in England,
in fuel poverty; the Government's own estimate indicates that
there are now some 4.6 million households. High energy prices
have been the biggest driver. The recession, plus the industries
investment plans and uncertainty over new generating capacity
will exacerbate the problem. The long term and sustainable solution
is to radically improve the thermal efficiency of the UK's housing
stock and by targeting the fuel poor first. It is, therefore,
essential that the government implement programmes to meet the
target of eradicating fuel poverty by 2016. Partnerships between
local authorities, energy suppliers, and charities with a door-by-door,
street-by-street model will be crucial to making more rapid progress.
1.2 How many homes could be in fuel poverty
by 2016 and should carbon abatement be paid equally by all
consumers?: With every one per cent increase in prices, another
40,000 households are added to the number of homes in fuel
poverty.[30]
FPAG remains deeply concerned that the costs and implication of
the UK's transition to a low carbon economy, has yet to be sufficiently
explored. The Government's Low Carbon Transition Plan reveals
an average additional cost of £72 per annum by 2020 for
residential consumers. The explicit assumption is that all consumers
will take 15% of their full energy efficiency makeover as comfort
and the remainder in reduced consumption. For the fuel poor, many
of whom under heat, this assumption is false and potentially misleads
about the future price of energy and, therefore, its affordability.
Furthermore, according to the Centre for Sustainable Energy, the
poorest 20% of society emit 60% less than the richest 20%. Should
all consumers therefore pay equally for carbon abatement? The
attribution of these costs and other levies on consumers' bills
to fund decarbonisation of energy production and its end use is
increasingly urgent and requires much greater transparency.
1.3 Capital provision for Energy efficiency
measures: Without Treasury funding, the provision of capital is
the most elusive element required to eradicate fuel poverty. FPAG
recommends alternative and private capital raising mechanisms
and innovative methods of recovery be trialled and explored, such
as cost recovery via smart meters. These include private capital
provision through a revised supplier's business model, and/or
allowing the fuel poor to be part of a regulated "fair trade"
tariff solution with energy efficiency measures.
1.4 Fuel poverty definition: The current
definition of fuel poverty should broadly remain unchanged with
a segmented and targeted approach to those most in need.
1.5 The coherence of the Government's initiatives
on energy efficiency: This could be significantly improved. Some
of the existing schemes can, on occasions, compete for the same
activity such as the CERT Priority Group and the main Government
fuel poverty scheme Warm Front. Private sector landlords should
have the appropriate incentives to meet specified levels of affordable
Thermal Comfort[31]
as a pre-condition of rental, such as by properly enforcing the
Housing, Health and Safety Rating System.
1.6 The methods used to target assistance:
Opportunities to share data, with appropriate safeguards exist,
but some are prohibited. For example, it is not currently possible
for local authorities to use data on Council Tax Benefits and
Housing Benefit for their own citizens to better target their
fuel poverty programmes. Enabling data from Energy Performance
Certificates, provided as part of the Home Improvement Packs,
to also be used by local authorities, and potentially other stakeholders,
for targeting. Capitalising on other face to face activities should
be explored.
1.7 Social tariffs and Social price support:
FPAG is concerned at the regressive nature of the fund raising
mechanism. This should be funded through general taxation and
not a levy on consumer's bills. Every pound that is spent on social
price support does nothing to reduce the long term capital requirement
to address poor levels of energy efficiency such as insulation.
In regard to social price support eligibility FPAG would support
the Cold Weather Payments criteria.
1.8 Winter Fuel Payments: This universal
and popular £2.7 billion (2008-09) payment means households
far from being in fuel poverty also benefit. For many pensioners
it is an essential pension supplement and the term "fuel
payment" is potentially misleading. Nevertheless, anomalies
such as payment to high rate taxpayers must be explored with a
view to the reallocation to those fuel poor households who stand
to benefit the most.
1.9 Support for households who are not connected
to the mains gas grid: Existing energy efficiency schemes provide
a limited range of support for a number of different property
types. There are alternative and renewable technology solutions
including air source heat pumps, solar thermal systems, biomass
heating and photovoltaic systems now available. FPAG wish to see
some larger scale demonstration projects to further establish
market knowledge, skills and confidence. We would also suggest
that there is an opportunity created by the future renewable and
nuclear energy mix. Resistive heating, that is where electricity
is converted back into heat, and the opportunity to inject marginal
cost energy throughout the day may be such an example and could
form part of the system balancing mechanism required in the future.
2. Context
2.1 Fuel Poverty Figures: The Government's
own estimate indicates that there are currently some 4.6 million
plus households in England in fuel poverty. This compares with
1.2 million in 2004. Almost 50% are pensioners and overall
some 80% can be categorised as vulnerable. The average domestic
dual fuel bills (gas and electricity) increased from £572 to
£1,287 (+125%) between January 2003 and September
2008. Although there has been some recent reduction in energy
prices, the long term trend is for them to increase.
2.2 Non gas areas: Government figures for
2006 indicate around 2.7 million homes in England do
not have mains gas; of these, just under 0.6 million (21%)
were fuel poor. Their plight is exacerbated by space and water
heating costs using kerosene or LPG being respectively 50% and
90% higher than those for mains gas.
2.3 Prepayment meters: 14% of households
that use a pre-payment meter for either gas, electricity or both
are fuel poor (2006 data)—this represents 19% of fuel-poor
households. 22% of households within the lowest income decile
use prepayment. The latest monitoring data from Ofgem (September
2009) shows prepayment installation for debt recovery at a current
rate of more than 1,000 per day (this excludes meter removals).
2.4 Energy debt: The recession, together
with this winter's extended period of cold weather, plus very
high energy prices, is going to cause severe payment difficulties
for many consumers. A worrying leading indicator of this is revealed
in Ofgem's Domestic suppliers' social obligations report Quarter
3 2009. This reveals an increase in the number of consumers
in Quarter 3 entering into new debt repayment arrangements
for both fuels; +13% electricity and +21% for gas. This is even
more worrying when compared to the same period for 2008; +105%
electricity and +149% for gas.
2.5 Tariff differentials: Despite some licence
modifications to ensure tariffs reflect their costs; FPAG remains
concerned that inequity persists. A pre-payment dual fuel consumer
could pay up to £280[32]
more than a consumer with an online deal via the internet and
paying by direct debit.
Note
The diverse nature of the Group's membership
may, on some occasions, prevent unanimity on some of the following
points.
3. Progress against Governments targets
3.1 In 2004 there were 1.2 million
households in fuel poverty. The Government's own estimate indicates
that there are now some 4.6 million households. The Government
has two statutory based fuel poverty targets in England:
— By 2010 no vulnerable households
to be in fuel poverty.
— By 2016 no households to be in fuel
poverty.
3.2 It is clear that the first target will
not be met. The second target is already in jeopardy, despite
some of the Government's very positive announcements which include:
— Heat and Energy Saving strategy (HES).
— Increased energy companies' social programmes.
— The 20 per cent uplift to the current
Carbon Emissions Reduction Target programme (CERT) and extension
to 2012.
— The Community Energy Saving Programme
(CESP).
— Increased Cold Weather Payments.
— Warm Front's budget increase.
3.3 These developments in themselves, although
welcome, are inadequate and further measures are required. Particularly
in the hard/expensive to treat properties off the mains gas network
and those with solid walls. Thus far, despite the increased risk
of severe fuel poverty for such households (about a half of all
fuel poor households live in such homes), there has been little
on offer to improve their energy efficiency. This must all be
part of a robustly co-ordinated and detailed plan, with key deliverables,
by whom, by when, plus the precise funding detail to eradicate
fuel poverty by 2016.
4. How many homes will be in fuel poverty
by 2016 and should we all pay equally for carbon abatement?
4.1 The UK is entering a transformational
energy context, but as we move to a low carbon economy, FPAG remains
concerned that the costs and its implication have yet to be sufficiently
explored. This is essential to adequately inform the decision
making process and subsequent policy instruments to ensure consumer
equity and affordability.
4.2 For example, DECC and Ofgem do not appear
to understand the apparent dichotomy of their respective conclusions
regarding the costs implications of low carbon energy for consumer's
energy bills. The Government's Low Carbon Transition Plan gives
only one energy price scenario, and a clearly optimistic one,
with an average additional cost of £72 per annum by
2020. This is based on the assumption that all consumers will
take 15% of their full energy efficiency makeover as comfort and
the rest in reduced consumption. For the fuel poor, many of whom
under heat, this assumption is false and could potentially lead
to complacency about the future affordability of energy for the
fuel poor. Ofgem's recent announcement raising affordability and
its other concerns is timely and welcome. Furthermore, Ofgem's
recent energy price scenarios indicate a potentially worst case
scenario of a 60% price increase.
4.3 Should all consumers pay equally
for carbon abatement? According to the Centre for Sustainable
Energy, the poorest 20% of society emit 60% less than the richest
20%! The attribution of these costs is important and will require
Ofgem's intervention to determine, for example, should recovery
be on a per kWh basis, plus a higher charge at a certain consumption
threshold? Smart meters could facilitate differential charging
if this became policy.
4.4 A range of factors, such as security
of supply, imported gas, carbon prices, low carbon objectives,
power station construction and policy issues etc all have the
potential to create uncertainty in the energy markets, drive energy
prices higher and, increase the numbers of households in fuel
poverty. A thorough analysis of these factors and their implications
for consumer equity and pressures placed on energy suppliers to
keep energy prices low must be undertaken.
4.5 With every one per cent increase in
prices, another 40,000 households are added to the number
of homes in fuel poverty (Consumer Focus 2009).
5. Capital provision for energy efficiency
measures
5.1 Without Treasury funding, the provision
of capital to enable the installation of energy efficiency measures
to eradicate fuel poverty is the most elusive element of the fuel
poverty challenge.
5.2 FPAG considers it essential that the
up-front installation costs of energy efficiency measures, including
more expensive measures, are fully funded for low income households.
6. There is an opportunity to explore whether
the supplier's business model can incorporate the capital provision,
from whatever source, for energy efficiency measures and a robust
cost recovery mechanism to assist the eradication fuel poverty.
6.1 Suppliers/Distribution Network Operators
(DNO's)/National Grid and others, with the appropriate cost recovery
mechanism, may be able to raise the capital, at an acceptable
cost, for energy efficiency measures, and this should be further
explored. Smart meters could facilitate the secure and long term
electronic means of cost recovery. This could endure through change
of supplier/ownership/tenancy, potentially by being tied to the
property and being an additional part of a unique long term Distribution
Use of System (DUOS) charge.
— Fuel poor consumer: If a supplier funds
and executes a full range of measures in return for a longer term
consumer relationship, part of a consumer's social price support
could be used to fund the capital interest payment. The capital
could be repaid when public funds permit or at the time of property
sale. If payment of the capital interest is made by Government,
then the consumer could remain within existing competitive market
rules.
— Non fuel poor consumer: Capital could
be recovered as per "Pay As You Save" proposal but over
a longer term. By using a smart meter channel for payment and
without the need to have separate billing, this should facilitate
lower risk and therefore better cost of capital.
6.2 As alternative to 6.1 above, or
a combination of both, the benefits of fuel poor households being
offered the opportunity to be part of a regulated solution with
a "fair trade" tariff and a complete energy efficiency
makeover should be explored.
6.3 The "fair trade" tariff may
not be the cheapest and could, for example be related to a small
percentage difference to the best online deal. Some 50% of the
fuel poor are pensioner households. Price differentials for the
internet literate consumer buying energy and being serviced on
line, compared to someone paying by prepayment for dual fuel,
is now in excess of £280 per annum.[33]
Some five million pensioners have never even been on line. Poor
literacy, numeracy, lack of broadband and being unbanked all drive
consumer exclusion from the competitive market. Nevertheless,
all consumers currently pay for the systems and overheads that
facilitate the competitive market.
6.4 The CERT extension proposals should
be developed so that suppliers are required to fully treat a particular
number of fuel poor households if a means can be found to identify
them.
6.5 The CERT extension provides an excellent
opportunity to help build the evidence base on which to determine
some elements of future energy policy and strategy. For example,
DECC analysis concludes that consumers' bills will increase on
average by only about £70 due to environmental requirements,
as previously mentioned.
6.6 Government should develop the smart
meter framework to facilitate a long term and robust cost recovery
mechanism/channel to enable consumers to purchase energy efficient
appliances. Old appliances tend to be less efficient that new
ones and fuel poor households are less able to acquire them. In
order to address this and also the future requirements for Demand
Side Management (DSM), Government should also explore the case
for appliances purchased via the proposal to be available for
DSM as a condition of sale.
6.7 Government should consider if there
should be an incentive for DNOs/National Grid to facilitate the
provision of capital and its long term cost recovery through the
mechanism outlined above. The fragmented nature of the energy
supply chain does not lend itself to the economic model that exists
in many other countries. However, Ofgem does seek to get DNOs
engaged in this through Distribution Price Control Review (DPCR)
5 compared to previous DPCRs which effectively facilitated
larger assets to meet growing demand. This could be incentivised
through investment in the network being avoided.
7. Fuel poverty definition
7.1 The current definition of fuel poverty
as a household needing to spend more than 10% of their household
income on all domestic fuel use, including appliances, to heat
their home to an adequate level of warmth, should remain unchanged.
However, with the inexorable rise in the numbers it is inevitable
that some segmentation and prioritisation must now be made to
address the most serious cases as a matter of extreme urgency.
8. The coherence of the Government's initiatives
on energy efficiency
8.1 The coherence and co-ordination of the
current policies must be significantly improved. The main programmes
are:
Warm Front FPAG believes that Warm Front has
been an extremely successful and beneficial programme. This provides
grants to private sector households claiming a range of means
tested and other welfare benefits to install a range of insulation
measures and heating systems. The Scheme has worked well and is
estimated to have assisted 215,000 households in the financial
year 2009-10. The Scheme assisted some 233,594 households
across England in 2008-09, saving an average of more than £350 per
year off their energy bills, and one tonne of carbon. In 2007-08 the
Scheme assisted 268,900 households, and in 2006-07 253,079.
With the increase in funding announced in the recent Pre-Budget
Report it is estimated the scheme will assist 166,000 households
in 2010-11.
More than 30% of the activity carried out under
Warm Front is in households with the lowest SAP ratings (less
than 30).
The Scheme's Benefit Entitlement Check service
identifies an average of more than £1,600 per year in
additional income for those households that successfully take
up the service.
Carbon Emissions Reduction Target (CERT): CERT's
primary obligation is to reduce carbon emissions with the companies
required to achieve a proportion of the savings (currently 40%)
from a so called Priority Group. The Priority Group is defined
as those households claiming a range of eligible benefits and
households with someone aged 70 or over. CERT delivers a
range of measures that provide the companies with cost effective
carbon savings. These include a limited range of insulation measures
including cavity wall and loft insulation. CERT measures can be
delivered in any home irrespective of tenure.
FPAG would like to emphasise the achievements
of schemes and programmes to date, in order to make clear that
a significant amount has been achieved, and with more investment
there is more that could very quickly be done
8.2 In addition local authorities and other
social landlords invest in energy efficiency measures in their
properties to meet the thermal comfort criteria of the Decent
Homes Standard.
8.3 These welcome programmes represent considerable
investment in energy efficiency and significant proportion of
which can be invested in schemes to address fuel poverty. However,
Warm Front and CERT will, for example, compete on occasions directly
to install the same measures in the same properties.
8.4 In addition, the six major energy supplier
companies can switch their schemes "on and off", often
at short notice, to manage the delivery of their targets. Similarly,
when Government funding for Warm Front is uncertain, forward planning
for suppliers and installers becomes very difficult. While this
will be logical from the companies' perspective, it creates significant
problems and militates against coherent, long term delivery and
investment in capacity.
8.5 The Thermal Comfort criterion of the
Decent Homes Standard has encouraged considerable investment in
energy efficiency in social sector properties. However, the standards
are relatively low and properties which meet the basic standards
are unlikely to provide affordable warmth to the majority of tenants
with today's increasing energy prices. While it is accepted that
many social landlords have gone beyond the minimum standards,
FPAG believes that the aim of the standard should be to provide
affordable warmth to the majority of social tenants. As such,
the thermal comfort criteria should, as a minimum, guarantee that
properties meet the current Building Regulations standards for
insulation and heating system efficiency. The Government is in
the process of reviewing the Decent Homes Standard. This review
offers the opportunity to revise the Standard to the extent that
it represents a more effective tool to address fuel poverty in
the social sector.
8.6 FPAG believes that Government should
now be taking the necessary action to ensure private sector landlords
have the appropriate incentive to meet specified levels of affordable
Thermal Comfort as a pre-condition of rental. Meanwhile, increasingly,
local authorities are setting targets for the proportion of private
sector properties in their areas required to meet the Decent Home
Standard. As a result, an enhanced Thermal Comfort requirement
in the Standard could also help to combat fuel poverty in owner
occupied and private rented properties.
9. The methods used to target assistance
at households which need it most.
9.1 The challenges around targeting are
well understood and FPAG welcomes the Pensions Act provision for
data sharing between the Department for Work and Pensions (DWP)
and energy suppliers. However, other opportunities to share data,
with appropriate safeguards, do exist but are either currently
not possible or have yet to be explored. These, for example, include
local authorities, and potentially other stakeholders, not being
able to use data on Council Tax Benefits and Housing Benefit for
their own citizens to better target their fuel poverty programmes.
Enabling data from Energy Performance Certificates, provided as
part of the Home Improvement Packs, to also be used by local authorities
for targeting.
9.2 Meanwhile, the Warm Front and CERT programmes
identified above are significantly demand led and therefore often
require potential beneficiaries to contact the companies or the
managing agents directly. The companies and managing agencies
also utilise a range of additional methods to target those eligible
for assistance, however, the related cost of so doing can lead
to limited attempts to target those most in need. For example,
the inclusion of all over 70's in the CERT Priority Group, means
it is more cost effective to promote these schemes to the more
articulate, aware and better off over 70's than those most in
need who may, for example, have literacy, numeracy or other learning
difficulties.
9.3 The direct, proactive approach taken
by, for example, Warm Zones, Green Streets, NEA, and the Warm
Front tariff pilot are much more effective at identifying the
target market. This approach, together with the partnership building
with local care agencies and other voluntary organisations, can
provide vulnerable households with reassurance and result in improved
take up amongst the most vulnerable and needy households.
9.4 FPAG, therefore, welcomes the proposed
data sharing exercise between suppliers and the DWP that seeks
to significantly improve the targeting of those most in need and
believe that it is essential that such data sharing can be made
to work effectively.
9.5 FPAG considers it essential that a national
property database of energy efficiency standards, potentially
building upon the Energy Saving Trust's Home Energy Efficiency
Database, is developed at the earliest opportunity. Such a database
could potentially play an invaluable role in targeting energy
efficiency and fuel poverty programmes if linked to data sharing
such as that being trialled with the DWP.
10. Social tariffs and Social price support
10.1 FPAG acknowledges that suppliers have
made progress in this respect and welcomes the Government's proposal
to put this on to a statutory basis in the form of social price
support. However, FPAG wishes to emphasise its concern at the
regressive nature of the fund raising mechanism and considers
that this should be funded through general taxation and not a
levy on consumer's bills. The increasing number of levies on fuel
bills and the consumer inequity that this creates has the potential
to put even more consumers into fuel poverty. Furthermore, it
must be recognised that social price support is a temporary fix
of a fuel poverty "symptom" and does not address the
"illness" of inadequate insulation. Every pound that
is spent on social price support does nothing to reduce the long
term capital requirement to address poor levels of insulation.
10.2 In regard to social price support eligibility,
notwithstanding the Group's previously listed concerns about the
regressive nature of the proposal, FPAG would support the Cold
Weather Payments criteria:
— People over 60 who receive Pension
Credit.
— Those with a child under 5 in the
family and get income Support or income-based Jobseeker's Allowance.
Or those who receive:
— pensioner premium, higher pensioner premium
or enhanced pensioner premium;
— disability premium or severe disability
premium;
— disabled child premium; and
— Child Tax Credit that includes an individual
element for a child or qualifying young person who is disabled
or severely disabled.
10.3 FPAG suggests households on means tested
benefits with school age children should be added to the above.
10.4 To deal with those off gas with only
electricity and who use electricity as their main heating fuel
should receive a higher level social tariff on their electricity
bills and broadly equivalent to the discount dual fuel consumers
would receive.
10.5 Eligible households with only electricity
and who use another fuel source, such as oil or LPG, as their
main heating fuel should receive a social price support on their
electricity bill and a "heating addition" within their
benefits. The "heating addition" should recognise the
additional costs associated with these heating fuels. This proposal,
and that in 10.5, would require some Ofgem intervention in order
for supplier equity due to different levels of non gas areas etc.
11. Winter Fuel Payments (WFP)
11.1 For 2008-09 the Government will
have spent circa £2.7 billion on WFP. The universal
nature of this popular payment means that millions of households
who are comparatively affluent and far removed from fuel poverty,
some even living overseas, and high rate taxpayers benefit from
the payment.
11.2 The Government has previously estimated
that the Payment removes only 100,000 households from fuel
poverty; an extremely poor return for such an investment. However,
FPAG does recognise that in addition to the difficulty of changing
this payment there is a real risk of damaging the undoubted benefit
this brings to those in or close to financial hardship particularly
during the winter months. For many pensioners the WFP is an essential
pension supplement and the term "fuel payment" is potentially
misleading.
11.3 Nevertheless, there are some clear
anomalies, such as payment to high rate taxpayers. This should
be explored with a view to the reallocation of monies to those
households who would benefit the most. For example, at an annual
cost of some £200 million those non-pensioner households
on the lowest incomes and with an additional vulnerability factor
i.e. some form of disability or a child under five years of age
could receive substantial direct support with their actual winter
fuel costs which could potentially be credited directly to their
energy accounts, and financial support to allow a capital provision
to be made available with interest only payments required.
12. Support for households who are not connected
to the mains gas grid
12.1 FPAG would wish to take this opportunity
to reinforce the need for creativity in the use of electricity
and for the fuel poor in particular. The future generating mix
will create a number of significant challenges in balancing supply
and demand in a renewable and nuclear energy context. The decision
to take production from a renewable source compared to nuclear
or clean coal will require new demand side management opportunities.
For example resistive heating in a fuel poor context and the opportunity
to inject marginal cost energy throughout the day should be thoroughly
explored as part of this strategy.
12.2 FPAG is concerned that current energy
efficiency schemes provide a limited range of support for households
occupying a number types of property, including those not connected
to the mains gas network. There is clear evidence that mains gas
is currently the cheapest fuel for space and water heating. FPAG
welcomes the recent introduction of arrangements by the energy
regulator, Ofgem, to fund the extension of the mains gas network
to households and communities living in the most deprived areas
in the short term.
12.3 There are alternatives heat sources,
Solar, Heat Pumps etc for non gas fuel poor consumers. Despite
Ofgem's proposal to facilitate some modest extension of the mains
gas network, there is a growing awareness that most off-gas communities
will, in the long run, have to rely on some form of alternative.
Uncertainties about longer-term gas prices provides a further
argument for adoption of heat sources and systems that can be
widely applied in rural and other hard/expensive to treat housing.
FPAG, therefore, welcomes the inclusion of alternative proven
technologies on the Warm Front Scheme to specifically benefit
fuel poor non gas households.
12.4 NEA, both through Warm Front and separately,
has been involved in a number of alternative and renewable technology
solutions including air-source heat pumps, solar thermal systems,
biomass heating and photovoltaic systems. NEA has also tested
state of the art internal insulation products that may prove commercially
viable and look to Government to demonstrate commitment and political
will in the widespread promotion and support of these new technologies.
12.5 FPAG would, therefore, wish to see
some larger scale demonstration projects to further establish
market knowledge, skills and confidence. In addition to the above,
a tower block as part of district heating scheme would be one
such example.
12.6 FPAG would also wish for the planning
process for new shopping centres and supermarket developments
to be required to explore the potential for their waste heat to
be reused. There are enormous amounts of heat dissipated to the
atmosphere through cooling and freezing in such developments.
12.7 Turning to heat pumps in particular,
their development brings the very real prospect of an alternative
solution to oil heating for non gas areas. FPAG would like to
see specific application tariffs developed as part of this programme.
Smart Meters will facilitate more creative tariffs and demand
side management opportunities. FPAG, therefore, asserts that OFGEM
be required to consider the regulatory incentives that would be
necessary to stimulate the development of such tariffs, and also
the implications for rural electricity networks coping with the
added demand.
February 2010
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