Ofgem has launched a consultation on requiring suppliers to offer low or no standing charge tariffs to their customers. Peter Smith, Director of Policy and Advocacy at fuel poverty charity National Energy Action, (NEA) comments:
‘These flat rate daily charges have grown increasingly unaffordable. Ofgem had consulted last year on reducing them by £50 this April but they have confirmed they won’t do this and now it’s likely they will increase instead, alongside a third successive hike to the price cap.
‘Beyond not addressing the impact of even higher charges, as any increase is just reflected in a higher unit cost, the system may continue to be unfair and impact on the most vulnerable. Ofgem’s headline proposal for a new zero standing charge tariff will mean people have to actively switch. While some may have the time or incentive – second homeowners or landlords etc – this type of market engagement is at an all-time low. Without the right support, the majority of vulnerable customers will lack the capacity, time and confidence. Regional differences in charges will also continue and will just be pushed into the higher unit rate. We are particularly worried prepayment meter customers may be left racking up increasingly unaffordable charges, which will continue to need to be repaid in full before they can turn on the lights or run a warm bath for their children.’