Preparing for winter: ESNZ Committee publishes Government response to report

Preparing for winter: ESNZ Committee publishes Government response to report

On 15th December 2023 ESNZ, the Energy Security and Net Zero Committee published the official Government response to its report from earlier in the year which called for “urgent action from Ministers, Ofgem and the energy industry to help households facing an apparently inevitable new winter crisis”.

To give you a little information into the background of this response … on 25th September 2023 an official House of Commons Committee report was published with recommendations to government which meant that the Government had two months to respond to it.

Quite simply the report stated that action was needed now to support vulnerable customers this winter. It raised a number of points and made a total of 13 conclusions and recommendation and called for a package of targeted support, by Government, for vulnerable groups and for a more proactive and more empathetic approach to customer service by energy companies.

Recommendations:

  1. That the Government ensures that all households who missed out on the 2022–23 Energy Bills Support Scheme should receive their payment with immediate effect.
  2. That the Government ensures that all households who missed out on the 2022–23 Energy Bills Support Scheme Alternative Funding should receive their payment with immediate effect.
  3. 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.
  4. That 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.
  9. That contact empathy be used as a measure of success in customer service provision by energy companies.
  10. 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.
  11. Ofgem to be quicker in challenging energy companies where they are failing to deliver quality customer service.
  12. The Government should engage with Ofgem to:
  13. 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;
  14. make clear to consumers the breakdown of the standing charge between network costs, operational costs, and policy costs; and
  15. remove operational costs from the standing charge, as these should be borne solely in consumer bills.
  16. Suitable mitigations should be adopted to ensure that high-need vulnerable groups are not penalised by the removal of a standing charge.
  17. 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.

You can download it and read the report in full below:

Preparing for the winter – a House of Commons Committee report >>>

Preparing for winter – ESNZ Response

The Energy Security and Net Zero Committee (ESNZ) is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Energy Security and Net Zero, and associated public bodies and it is this committee who were tasked with responding.

It came by way of a short, 10 page response which addressed each of the above recommendations in turn and can be downloaded via the link below:

Preparing for the winter – Government Response >>>

A few key specifics … in response to a Committee recommendation that the Government should engage with Ofgem to revise the standing charge model, the energy regulator has launched a call for input from bill-payers, businesses and charities on what could replace it.

Among other wins for the Committee, the Government response also highlights the new rules implemented by Ofgem aimed at improving customer support from energy suppliers.

The response however makes no mention of any intention by Ministers to consult on the introduction of a social tariff or updating rules around eligibility for the Cold Weather Payment.

Angus Brendan MacNeil MP, Chair of the ESNZ Committee, said:

“We welcome the fact that the Government and Ofgem have listened to the Committee and have opened the door to the process of replacing the standing charge with a much fairer system. The introduction of new rules designed to boost the accessibility of support for customers is also a good first step. But rules are one thing and action is another. With no commitment to establishing a dedicated telephone line for trusted intermediaries, the Committee will be expecting energy companies to tell us exactly how they are prioritising access to consumer support for those acting on behalf of vulnerable customers.”

The Committee is currently seeking views on the standing charge and social tariff as part of its inquiry examining the process of billing customers for their gas and electricity, looking at whether the rules on charging for energy are fair for all.

Preparing For Winter – The Need To Improve Energy Efficiency

Clearly this report focusses on action needed to be taken NOW to address the issues faced by the more vulnerable households preparing for winter this year and, as such, Energy Efficiency Matters supports all recommendations.

However it also further highlights the need for a long term solution and that means taking action to significantly improve the energy efficiency of the houses these families are living it. The vies of Energy Efficiency Matters are that addressing the whole house on a fabric first basis is going to make a huge difference to the cost of keeping houses warm whilst keeping bill low on an ongoing basis so we say provide the interim support but address the long term problem!