Originally published by Utility Week, this article discusses whether changing support scheme thresholds would provide access to cheap energy tariffs lack for vulnerable customers…
The majority of the cheapest energy tariffs do not include provision to support schemes aimed at vulnerable customers, research from First Utility has revealed.
It found 93 of the cheapest 100 energy tariffs are offered by suppliers exempt from the Energy Company Obligation (ECO) and Warm Home Discount (WHD) schemes.
The challenger supplier, which was recently acquired by Shell, suggests smaller suppliers with fewer than 250,000 customers should no longer be exempt from the schemes.
Ed Kamm, chief commercial officer at First Utility, said: “Funding for critical programmes like the Warm Home Discount and ECO needs to be fair and proportionate. It can’t be right that the costs of paying for these benefits falls more proportionately on those who need the most help.
“The government must ensure that all suppliers support the programme for the benefit of vulnerable customers. Both schemes have been radically simplified so the reasons for exempting smaller suppliers no longer exist – the cost of participating in these vital schemes is now the same regardless of supplier size.”
John Penrose MP backed calls for a review of how the schemes are funded. He said:“These schemes are important for making sure less well-off families have warm homes. But it’s only fair for energy firms to compete on a field that’s fair and level.
“It’s time to look at the scheme thresholds and see whether they should be moved now we’ve got 50 energy firms rather than just six, and new technologies coming on-stream every day too.”
In a recent government submission, Citizens Advice argued: “The WHD is not a great burden to suppliers in terms of cost.”
It suggested the current set-up could prevent WHD recipients from switching suppliers for fear of losing out on the payment.
The Business, Energy and Industrial Strategy department last month confirmed there will be 16 WHD participants for 2018/19 – Bristol Energy on a voluntary basis, plus 15 suppliers over the 250,000-customer base policy cost threshold.
The WHD requires participating suppliers to pay £140 a year to customers who receive pension credit or other benefits.
The government is consulting on the design of the ECO and WHD schemes.