The End Fuel Poverty Coalition has written to Jonathan Brearley, chief executive of Ofgem, calling on the regulator to instigate five urgent reforms to the energy market to help the millions of homes in fuel poverty1. The letter, copied to the Secretary of State for Business, Energy and Industrial Strategy and the Chair of the Commons BEIS Committee, thanks Brearley for his appearance at the Commons BEIS Committee which, it says, "sparked the financial support outlined by the Chancellor on 26 May 2022"1.
The Coalition's first request is that Ofgem abandon plans to introduce a quarterly price cap increase in January 2023, which it says will penalise households in the depths of winter, and instead move to a three-times a year model at most1. It also wants reform of the price cap itself, "especially so that it does more to help those on pre-payment meters and is extended to cover people off-gas and on heat networks"1.
Further requests cover supplier support, standing charges and longer-term market reform. The Coalition asks Ofgem to work with suppliers on a package of additional support for this winter, similar in scope to that introduced during the pandemic but enhanced given the numbers expected to be in fuel poverty, and extending to debt relief rather than deferral1. It calls for "urgent reform of the regressive and punitive standing charges regime that penalises the most vulnerable", saying these charges should be reduced1. In the longer term it asks Ofgem to review the operation of the price cap and consider a price ceiling, described as a "super cap" set at current levels over which consumers will not have to pay for fair usage, and the introduction of a social tariff or "energy for all allowance"1.
"The End Fuel Poverty Coalition would like to thank you for your appearance at the Commons BEIS Committee which sparked the financial support outlined by the Chancellor on 26 May 2022."
The letter sets out five areas of requested action:
| Area | Requested change |
|---|---|
| Price cap timetable | Abandon quarterly cap; move to three times a year at most |
| Price cap scope | More help for pre-payment meter customers; extend to off-gas and heat network consumers |
| Supplier support | Winter package similar to pandemic-era support, with debt relief |
| Standing charges | Reduce the charges the Coalition calls regressive and punitive |
| Longer term | Review the price cap; consider a "super cap" and a social tariff |
The Coalition's letter also carries comments from other organisations. Ian Preston, director of household energy services at the Centre for Sustainable Energy, said short-term support measures are "only short-term sticking plasters" and called for a longer-term, large scale home retrofit programme with a green skills strategy, adding that "CSE's energy advice line calls are at an all-time high"1. Jan Shortt, General Secretary of the National Pensioners' Convention, said the NPC has also written to Ofgem and the Chancellor, calling for specific actions "before the price cap rises again in October to a shocking average of £2,800 a year"1.
Why it matters for households
The letter concerns the rules that set what households pay for gas and electricity, and how often those rules can change. A quarterly price cap would mean a possible increase in January, in the middle of winter, rather than the current pattern of fewer, larger adjustments1. Standing charges are the fixed daily amounts added to bills regardless of how much energy is used, so their level affects every connected home, and the Coalition argues the current regime penalises the most vulnerable1. Pre-payment meter customers, households off the gas grid and those on heat networks are singled out as groups the price cap does not adequately protect1. For a home trying to manage its own energy costs, the outcome of this correspondence affects the floor price of being connected, before any energy is used.
What happens next
The letter requests a future meeting of the End Fuel Poverty Coalition with Ofgem's chief executive to discuss the issues raised1. No response from Ofgem, and no decision on the quarterly price cap change or the other requested reforms, has been reported. The Coalition states that the price cap is expected to rise again in October to an average of £2,800 a year1. The wider framework within which Ofgem sets and reviews the cap is covered in the site's regulation and policy pages.
Sources1 cited
- End Fuel Poverty Coalition calls for further Ofgem action - End Fuel Poverty Coalition, endfuelpoverty.org.uk