AUTUMN LEAVES MILLIONS WORSE OFF
All of the Big Six energy suppliers have now published their revised tariffs for what we must assume will be the winter period, and things look fairly bleak for millions of UK households. The table below shows each company's increased charges for gas and electricity and the overall impact on the average dual-fuel bill. There is some disparity in the scale of increased charges for electricity and rather less in the case of gas.
NEA estimates that when all of the price increases have been factored in the average annual bill for a standard credit customer will be £1,294; for a prepayment meter user it will be £1,275; and for a consumer paying by monthly direct debit the cost will be £1,194.
The table also illustrates some of the difficulties associated with the seeming volatility of domestic energy markets and supplier decisions on pricing. If disillusioned energy consumers don't respond by switching supplier then it makes sense to go early with price rises; conversely, if consumers do switch in response to price hikes then the best option is to be last in the queue.
If Ofgem wishes to restore faith in the competitive market it might be a good idea to require energy suppliers to commit to a set of tariffs for a minimum period during which no increases would be permitted. This would eliminate the brinkmanship from pricing strategies and allow advisors to state with more confidence what the best option was for an individual client's circumstances.
| Company | Gas increase | Electricity increase | Effective | Dual-fuel bill increase |
| ScottishPower | 19% | 10% | August 1 2011 | £175 |
| British Gas | 18% | 16% | August 18 2011 | £190 |
| Scottish and Southern | 18% | 11% | September 14 2011 | £171 |
| RWE nPower | 15.7% | 7.2% | October 1 2011 | £135 |
| EdF Energy | 15.4% | 4.5% | November 10 2011 | £120 |
| E.ON | 18.1% | 11.4% | September 13 2011 | £157 |
TARIFFS MADE SIMPLE(R)
Ofgem is proposing to impose a number of changes to the ways in which suppliers develop tariffs and present information to customers. The regulator's proposals are intended to reduce confusion in the competitive market and to make price comparisons much more straightforward. Ofgem proposes that, in the case of non-fixed tariffs where suppliers can unilaterally vary charges:
• All suppliers should have only one tariff per payment method
• Suppliers can only offer a single unit price so that consumers can immediately identify the cheapest tariff
• The standing charge to cover suppliers' fixed costs should be set at a uniform level
ENERGY BILL UPDATE
The Energy Bill has now completed its final House of Commons stages and has returned to the House of Lords for final consideration on October 4. Report Stage represented the final opportunity for MPs to extract concessions from Government in relation to the areas of greatest interest to fuel poverty campaigners:
• The Green Deal
• The Energy Company Obligation
• Energy efficiency in the private rented sector
In the event the final discussions on September 14 added little detail to what we know about the Coalition Government's proposals.
The Green Deal
A number of issues are not yet resolved including the full list of measures permissible under the Green Deal or what the typical interest payments will be. It is also proposed that the Energy Company Obligation will subsidise the installation cost of expensive measures where compliance with the ‘Golden Rule' is not feasible. This approach is intended to deliver significant carbon reduction through, for example, developing the market for solid wall insulation. NEA takes the view that all ECO funding should be devoted to fuel poverty programmes and that both social and environmental objectives should be met through work on behalf of financially disadvantaged households.
The Energy Company Obligation
The Energy Company Obligation is intended to fund measures to benefit financially disadvantaged households i.e. those whose financial circumstances mean that they are unable to access and/or repay a Green Deal finance arrangement. The level of funding for the Energy Company Obligation has not been finally decide but it is expected to be in the region of £1 billion to £2 billion per year.
The value of the Energy Company Obligation in addressing fuel poverty will depend on the level of resources and how this is split between expenditure on vulnerable households and subsidies to expensive Green Deal measures. NEA argues that Energy Company Obligation resources should be devoted entirely to fuel poverty programmes which can deliver both social and environmental benefits.
During the Report Stage debate, comments from Energy Minister, Greg Barker, suggested that the Government saw the Energy Company Obligation as an essential element of fuel poverty policy: "I think the vast majority of the types of vulnerable consumer the hon. Gentleman is worried about will be captured by the whole-community approach that we anticipate will be taken up by many local authorities in street-by-street approaches. We need the ECO to be able to offer insulation and home improvements to whole streets, regardless of income, to ensure that we do these things at scale. I do not pretend that we have the perfect solution, but I believe that what we have is by far the best approach in comparison with anything tried before."
Despite these apparent assurances, and the Minister's support for NEA's area-based model of energy efficiency delivery, there are growing concerns that Energy Company Obligation resources will be concentrated on carbon reduction rather than on fuel poverty reduction.
Consultation on the detail surrounding the Energy Company Obligation is expected to begin in autumn 2011.
The private rented sector
The private rented sector contains some of the worst of the nation's housing stock and the Energy Bill proposes remedial action to improve the worst of these dwellings. From April 2016 tenants will be able to request the right to implement energy efficiency energy efficiency improvement works to which the landlord must consent. From 2018, private landlords will be required to improve any property that is rated F or G on the Energy Performance Certificate scale with a minimum target rating of EPC Band E.
NEA had sought clarification of exactly what was required of landlords where tenants requested energy efficiency improvements. The Department of Energy and Climate Change has confirmed that the legislation will only require landlords to grant permission for improvement works and that they are under no obligation to undertake these works.
Properties that are rated F or G on the Energy Performance Certificate scale are of such poor standard in terms of heating and insulation that they can pose a threat to the health and welfare of the occupants. As the table below illustrates, the highest proportion of these properties are found in the private sector.
| Energy efficiency rating by EPC Band and tenure – England 2009 | ||||||
| | EPC Band | |||||
| Tenure | A/B | C | D | E | F | G |
| Owner occupied | 0.2% | 8.9% | 36.3% | 38.6% | 12.6% | 3.4% |
| Private rented | 1.2% | 14.7% | 35.0% | 30.2% | 13.2% | 5.8% |
| Local authority | 1.1% | 24.7% | 46.5% | 20.5% | 5.6% | 1.6% |
| Housing association | 2.7% | 32.7% | 43.2% | 15.8% | 4.6% | 1.0% |
DEBT AND DISCONNECTION
Ofgem is currently undertaking a short consultation on information collected from energy suppliers relating to their social obligations. In effect the data collected covers supplier practice in monitoring and managing debt and disconnection. One proposal is intended to provide the regulator with a better understanding of indebted customers through monitoring of customers in arrears for more than 91 days. This will identify consumers struggling to pay their energy charges - the current practice limits the definition of debt to those with an existing debt recovery arrangement.
Other proposed changes reflect the imminent roll-out of smart metering. Suppliers will be required to report on issues such as load and credit limiting and remote switching of payment methods and disconnection. Other areas of scrutiny include information provided to the regulator on the Priority Services Register and supplier energy efficiency advice services. The consultation closes on 1 November 2011.
Social obligations data review
RIGHT TO REPLY
Following on from last month's ‘HEED Count' article we received the following response from NEA members Westminster City Council. "As the article states 'the amount of work carried out is heavily influenced by the built-form of housing in the area' and we are keen to address this and the additional barriers that face Westminster and other London councils."
No More Lagging Behind: Securing London's fair share of insulation funding
Recent figures published by EST[1] show that despite having 15% of England's population, less than 5% of jobs funded through the Carbon Emissions Reduction Target (CERT) have taken place in Greater London. Further to this the London Assembly Environment Committee estimates that only about 4.5 per cent of insulations under the previous supplier obligation the Energy Efficiency Commitment (EEC) were delivered in London[2].
Many London boroughs put significant effort into maximising the energy efficiency of London's homes however the limited funding received by London under EEC and CERT can be attributed to a number of factors such as the nature of the housing stock, access, ownership and parking.
Hard to treat properties
71% of London properties are classified as hard to treat with 57% of London's homes of solid wall construction[3].
Private sector flats
Almost half of London's households live in flats, maisonettes or apartments[4]. The walls and loft spaces of privately owned blocks of flats are referred to as common parts and the mechanism for the insulation of these present significant legal challenges which remain to date relatively unexplored, nevertheless, it is clear that legislative changes are required to allow improvements to common parts to be carried out without the need for administratively complex and costly changes to individual leases.
Heritage properties
London has a large number of conservation areas and a high number of listed buildings. Energy efficiency improvements to these buildings require sensitivity and can often be more costly.
Private rented sector London has a high proportion of homes in the private rented sector (20% in London compared to 13% nationally)[5].
Access and parking
Access and parking can be limited and costly and is acknowledged as a barrier to delivery and a disincentive for contractors to carry out works in London.
These issues are compounded in Central London, for example, in Westminster which had the second lowest insulation rate in the Country, 88% of dwellings are flats, around 90% of the borough is a conservation area and the private rented sector is three times the national average.
To improve the uptake of insulation measures in London we must address the intrinsic challenges of the housing stock, offer regionally appropriate measures and create an incentive for delivery in London. The London Carbon Action Network is therefore lobbying for a regional target under CERT and the forthcoming Energy Company Obligation (see attached). We believe that a regional target would enable fair distribution of available funds and delivery of regionally appropriate measures, not just for London but for all regions.
[2] http://legacy.london.gov.uk/assembly/reports/environment/lagging-behind.pdf
[3] English Housing Condition Survey, 2003
[4] Information taken from Census 2001
[5] CLG Live table 110 , figures from 20 08 ( http://www.communiti e s.gov.uk/documents/housing/xls/table-110.xls )
NEA plays a crucial role in developing courses to meet industry requirements and over the past two decades has provided knowledge and skills through training and assessment to over 17,000 participants. We deliver high quality, practical courses designed specifically to support advisers in their day-to-day work.
NEA's courses are recognised by DECC and the CLG as suitable advisor training for draw down from CERT/CESP funding (intrim measure until 2012) and are also a requirement under the Warm Homes, Greener Homes Strategy for anyone providing non face-to-face advice (for example call centre staff).
Qualifications accredited through City and Guilds of London Institute include:
- Energy Awareness 6281-01 (previously 6176-01)
- Renewable Energy in the Home 6281-01 (previously 6176-02)
- Provide Energy Efficiency Services (PEES) NVO Level 3
- Insulation and Building Treatments NVQ Level 2
Go to www.nea.org.uk/energy-training to find out more.
2011 SEMINAR SERIES
Spotlight on the Energy Company Obligation: Engaging in the consultation process
This series of four seminars is being organised by NEA with support from British Gas to ensure that all relevant agencies at a local level have the opportunity to engage with the consultation on the Government's proposed Energy Company Obligation (ECO).
Seminars will take place on:
23 November (AM), Prospero House, London
30 November (AM), Maple House, Birmingham
1 December (AM), Manchester (venue TBC)
5 December (PM), Centre for Life, Newcastle
For more info click on the link below and look out for the email dropping in your inbox soon.
http://www.nea.org.uk/nea-seminar-series-2011-spotlight-on-the-energy-company-obligation/
To reserve a place please email Brian Hart giving your full contact details, the location of the event you intend to go to and any specific dietary or facility requirements you may have.
COMMUNITY FOOTPRINT AWARD- TAKING STEPS TOGETHER TO SAVE FOR THE FUTURE
2011-12 will see NEA's Footprint Award evolve into the ‘Community Footprint Award - Taking steps together to save for the future', sponsored by British Gas.
The Community Footprint Award aims to reward projects throughout England which demonstrate best practice in the field of fuel poverty and carbon savings.
A regional winner from each of the nine regions in England will receive an award of £2,000. The nine regional winners will then be judged for the national award with a further prize of £3,000.
If you are in any way involved in the fight against fuel poverty and climate change then you could be the 2011-12 winner of the Community Footprint Award.
All entries and ideas are welcomed, the more creative the solution and project the more excited we get. Previous applicants are welcome to apply. Closing date is 9 December 2011.
For more information about the awards or to register your interest please contact Lesley Tudor-Snodin on email lts@nea.org.uk for details or visit http://www.nea.org.uk/footprint-award/.
WARM HOMES CAMPAIGN AWARD 2011
NEA's Warm Homes Campaign, this year sponsored by E.ON, will launch in November and run until December 2011.
We are looking for members to become involved in this year's campaign, showing off good practice in the fields of fuel poverty reduction and energy efficiency. If you have an interesting story to tell or a case study which you would like to highlight during the campaign please get in touch with Lesley Tudor-Snodin to find out more.
BIG LOTTERY - REACHING COMMUNITIES FUND FOR BUILDINGS
It has been reported that this fund, offering between £100,000 and £500,000 for large capital projects, has had poor take up and those applications that have been received have often failed to sufficiently demonstrate how they will achieve the BIG outcomes in the years after the build and have focused too much on the building stage of the project instead. BIG's outcomes are:
- People having better chances in life, with better access to training and development to improve their life skills
- Stronger communities, with more active citizens working together to tackle their problems
- Improved rural and urban environments, which communities are better able to access and enjoy
- Healthier and more active people and communities.
To find out more visit www.biglotteryfund.org.uk.
SURVIVING WINTER
Community Foundations make a difference by bringing together local philanthropists who wish to give money to support their local community with dynamic local organisations. They understand their local communities and each community foundation is unique, identifying local needs and mobilising local resources.
In the coming weeks, NEA will be launching a 'Donate Your Winter Fuel Payment' campaign in partnership with a number of community foundations up and down the country, and will be encouraging over 60s who are fortunate enough not to depend on their Winter Fuel Payment to consider donating some or all of this to their local community foundation.
The funds raised will be used to deliver a range of projects and programmes aimed at alleviating fuel poverty in the local community foundation areas, with NEA's expert staff leading and delivering some of the programmes. We would welcome NEA members, in particular local authority members, to help us promote the campaign in their local areas through their community newsletters and websites.
To find out which Community Foundations we are planning to work with and to help us promote the campaign locally, please contact Jen Carruthers Jones.
