NEA Fuel Debt Advice Bulletin May 2013

With the cold weather experienced in the early part of this year, reports suggest that domestic fuel consumption has risen between 18% and 30%, adding an estimated £150 – £200 to this year’s annual gas bill for households. The energy watchdog, Ofgem, has also released figures that found a typical annual dual fuel bill stands at £1,420, reflecting a 29% increase since April 2010.

Coupled with the likely negative impact on household income of Welfare Reform, which commenced in April, many more households are likely to fall into fuel debt or experience increased levels of fuel debt, with reports suggesting that there are now 5 million households in debt to their energy suppliers with an average debt of £637.

This edition of the Fuel Debt Advice Bulletin looks at a number of initiatives that could help you to help householders maximise their income.  Contents include:

• Collective Switching
• Debt Assignment Protocol
• Confidence Code
• Warm Home Discount Scheme
• Consumer Focus
• Reports
• NEA Update

• NEA Update

Warm Home Discount Scheme

The Warm Home Discount (WHD) scheme is now into its third year and in 2013/14 will be providing a one-off payment on the electricity bill of £135 for eligible customers.  This equates to an annual spend of £300 million for this year.

The Core Group criteria for the 2013/14 WHD are as follows:

You qualify for the discount if on 20 July 2013 your supplier was part of the scheme, your name (or your partner’s) was on the bill and you were either:

• 75 or over and getting the Guarantee Credit element of Pension Credit (even if you get Savings Credit)
• under 75 and only getting the Guarantee Credit element of Pension Credit (you won’t qualify if you also get Savings Credit)

The Broader Group criteria for 2013/14 are similar to last year’s with some suppliers open for applications now and the rest will be in the very near future.

 Increasing the monetary threshold for PPM customers switching with a debt

Suppliers have agreed to increase the limit for switching with a PPM to £500 and to take effect from 1 November 2012.

The £200 PPM debt threshold for switching is enshrined in the gas and electricity supply licences. Any change to the amount in the relevant licence condition could only be made following a formal licence change process which would take a number of months before a revised amount could be implemented.  Therefore, the commitment by suppliers to increase the DAP limit to £500 and to undertake many of the awareness raising and process improvements from 1 November 2012 is entirely voluntary.

Improving the process so that customers who wish to switch are able to do so without difficulty

Suppliers have agreed to:

• revise the letter (known as a ‘DAP objection’ letter) that the customer is initially sent by their old supplier when they try to switch supplier to ensure that information about the DAP is prominent and the first point made
• share information and good practice between suppliers to remove inconsistencies in the operation of the process, and
• establish a supplier working group to examine how improvements may be made to industry processes and examine the process for sharing debt information between suppliers.