Ofgem, standing up for the fuel poor?
12th Feb 2018
Last week I spent the afternoon celebrating the achievements of the “Heat Heroes”, at an event organised by the fuel poverty charity NEA. There were some great examples of action, not just warm words, to combat the blight that is 4 million UK households living in fuel poverty. Representatives from the energy regulator Ofgem were also present. I hope they learned something, because in terms of actions, Ofgem risk making fuel poverty worse not better.
The fuel poverty trilemma is simple – it is a combination of energy unit prices, the efficiency with which energy is used in the home and income levels of the householder. Ofgem knows this all too well. So why, do you ask, are they making it harder for the gas networks to deliver on their fuel poverty obligations?
Up until recently, the networks were allowed to use an Index of Multiple Deprivation as the geographical area indicator that triggered the approval of the Fuel Poor Network Extension Scheme obligation – connecting for free fuel poor homes to the gas network. This gives access to the fuel poor a cheaper unit price for energy and more often than not, a more efficient heating system too. But Ofgem believe the targeting isn’t precise enough. They acknowledge that the fuel poor disproportionately live in IMD areas, but not everyone who does lives in fuel poverty.
I don’t disagree. But let me give a different slant. Fuel poverty is fluid for many households – their income levels can and do vary, but their housing conditions tend to be more permanent. So equipping a property situated in an area of deprivation with a cheaper energy source may not help the current householder, in their current situation, but if their circumstances change for the worse someone who is now fuel poor (by the strict Ofgem interpretation) is helped by default. By supporting the permanent change in condition of the house and accessing cheaper fuel Ofgem could change lives now and in the future. Instead, they have chosen to make it more difficult for the networks and will no doubt claw some money back from them too.
EUA's Chief Executive