When we published our recent report about fuel poverty, Let Us Switch!, we challenged the energy regulator Ofgem to come and meet with people on low incomes who are forced by prepayment meters to pay extortionate prices for energy.
The meeting took place on 7 March in Salford. The equitable energy supplier Ebico, who supported our research, sent their chair Hugh Lee to take part. We invited Hugh to share his reflections on the meeting:
The ‘School of Participation’ is a 12-week programme organised by Church Action on Poverty. They invite about a dozen people in Salford who have direct experience of some aspect of poverty to meet for two hours a week over lunch to talk about what can be done about it. This School of Participation was on fuel poverty and we met with them for their fifth session.
The following things came up during the meeting.
One participant described how she had moved into a flat that had prepayment meters (PPMs) for both gas and electricity. English was not her first language and she has no idea how to operate a PPM.
As a result, she was without any heating, hot water, cooking or light for a whole week while she discovered what to do.
She later discovered that the PPMs were still set to deduct about £4 per week to pay off the debt of the previous tenant. It took her 12 months to convince her supplier that she should not be paying this debt (the supplier insisted on being sent a copy of her tenancy agreement, among other things), and she was eventually refunded about £400.
Other participants said that they had wanted to switch from PPMs to credit meters but they had been told they would be charged £250 to have both their gas and electricity PPMs removed. When they telephone a supplier, they get conflicting information and the phone call takes a long time and so is expensive. Suppliers should have numbers that are Freephone from a mobile.
Two participants described how their PPMs are in awkward places. One of them has to get on her hands and knees and crawl into a cupboard to put credit on her PPM.
Of gem said that, according to their regulations, ‘vulnerable’ customers should not be given a PPM and that, if a customer with a PPM becomes vulnerable, their meter should be changed to a credit meter free of charge. A vulnerable customer is anybody who would find it difficult for physical or mental/emotional reasons, to get to a shop to have their key/card charged or to operate a PPM. The staff in the call centres of suppliers are supposed to be trained to look out for vulnerable customers and act accordingly.
Another participant said she wanted to pay by Direct Debit because then she could pay the same amount a month in the summer and winter. At present she would have to pay £50 per week to keep warm.
She has worked out that it costs 90 pence an hour to have her gas central heating on; she rations her family to only a few hours a day.
Ofgem said that everybody should receive an annual statement which tells them which tariff they are on and how to switch to a cheaper tariff, etc. Most of the participants said that they had never received an annual statement.
Ofgem mentioned two of their publications Be an energy shopper and Energy Best Deal which they hoped would help participants
We talked about the Debt Assignment Protocol, but nobody present had had any experience or stories of others trying to switch supplier when they had a PPM debt. Many of the participants said that switching should be as quick and as easy as possible, with only one phone call needed even if you have a debt.
Ofgem said that they expected a number of the problems of PPMs to be solved/removed when smart meters are introduced. However, they recognised that that was still some way off and smart meters will not put everything right. The first smart meters will not be installed until October 2015, when the massive computer system to record all the data goes live; everybody must have a smart meter by 2020. At present, suppliers are giving some customers ‘smartish’ meters. Smart meters are being installed by the suppliers and they will decide which of their customer will get smart meters first or early. The participants said that Church Action on Poverty could campaign for the suppliers to be required to install smart meters first/early in homes that have PPMs.
I pointed out that in Northern Ireland, everybody had been given a smartish meter that is PPM-capable. The result is that customers are given something like a 4% discount if they pre-pay, but a 9% discount if they pay by direct debit (these discounts are off the quarterly pay tariff). When smart meters start being installed in Britain, it would be unfair to have different tariffs for those with and without smart meters. So I suggested that Church Action on Poverty could campaign for similar discounts to be given (soon after the start of the smart meter roll out) to all who pre-pay, whether or not they have got a smart meter. This would give an incentive to the suppliers to replace PPMs with Smart meters early.
Ebico is the only UK energy supplier which charges Fair Prices to all customers, however they pay for their energy. They worked in partnership with Church Action on Poverty on Let Us Switch!