OFGEM UPDATE - PREPAYMENT SCALE OF FUEL DEBT MARCH 2015

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1 Page 1 of 5 NEA Cymru Fuel Debt Advice Bulletin View in browser MARCH 2015 OFGEM UPDATE - PREPAYMENT Ofgem is reviewing domestic energy suppliers policies relating to charges for the installation and removal of prepayment meters; requirements for security deposits; provision of information to prepayment customers; and prepayment tariff choices. They will publish a report on their findings and next steps in the summer. SCALE OF FUEL DEBT In case you missed it in the last Bulletin, Ofgem published its latest report in December on how suppliers managed debt and disconnection in The report shows: The total number of customers in debt rose in 2013, but the average amount owed was similar to At the end of 2013 (the latest data Ofgem has), approximately 6% of domestic electricity accounts (1.5 million) and 6% of domestic gas accounts (1.4 million) in Great Britain were in debt. This is more than at the end of 2012, when approximately 5% of domestic electricity and 5% of domestic gas accounts were in debt. This includes customers repaying debt and customers who have not yet agreed a repayment arrangement (customers in arrears). The average amount of debt customers were repaying in 2013 was similar to what they were repaying in for electricity accounts and 323 for gas accounts. Around 40% of customers repaying debt owe less than 100. The rise in the total amount of customers repaying debt in 2013 was driven by increasing numbers of customers repaying debt in England. Trends in Scotland and Wales were different. The number of electricity customers repaying debt in Scotland and Wales fell in 2013, and the increase in the number of gas accounts repaying debt in those two countries was smaller than the increase seen in England. See the tables below for the figures. By the end of 2013 there were more than 4 million electricity pre-payment meters in Britain and over 3 million gas PPM accounts. This is an increase of 4% and 6% respectively compared with 2012.

2 Page 2 of 5 Number of electricity accounts with a customer repaying a debt on 31 December in 2010, 2011, 2012 and 2013 Country Percentage Percentage GB 853, , ,911 1,017,147 19% 13% England 691, , , ,666 24% 17% Scotland 124, , , ,050-10% -3% Wales 37,767 37,322 46,484 44,431 18% -4% Number of gas accounts with a customer repaying a debt on 31 December in 2010, 2011, 2012 and 2013 Country Percentage Percentage GB 711, , , ,122 32% 17% England 602, , , ,139 33% 19% Scotland 78,111 83,782 86,413 91,997 18% 6% Wales 30,638 33,515 38,356 39,986 31% 4% Source: Ofgem s Domestic Suppliers Social Obligations Data REMINDER: CUSTOMER REFUNDS After Ofgem identified a surplus of 153 million on accounts, the Big Six energy suppliers announced the launch of the MyEnergyCredit campaign in September 2014 to reunite cash with former customers. MyEnergyCredit helps people who ve moved or switched claim money back that may have been left behind with their old supplier. No matter how long has passed, legitimate claims will always be refunded. The average credit balance is around 50. Call or visit MyEnergyCredit and select your energy company to find out more about the claims process. WARM HOME DISCOUNT /16 EXTENSION The Government s Warm Home Discount Consultation Response was released on 29 January. In summary, the rebate will remain at 140 in 2015/16 and retain the eligibility criteria of the Core Group to those in receipt of Pension Credit Guarantee Credit or Pension Credit Guarantee Credit (with Savings Credit).

3 Page 3 of 5 However, compulsory standard criteria for the Broader Group will be introduced but retain flexibility for suppliers to have additional criteria subject to Ofgem s approval. In addition, 2015/16 will include the provision of a rebate to eligible park home residents. For more information and to read the response, please click here. COMPENSATION FOR POWER CUTS Ofgem rules state that if severe weather means you are without electricity for 24 hours continuously (or 48 hours in some cases), you are entitled to 27 compensation plus an additional 27 for each further 12 hours. However, from 1 April 2015, the minimum payout will rise from 27 to 70, as will the additional payment for each further 12 hours without power. The total cap for payouts will rise from 216 to 700. To claim compensation, you need to contact your regional electricity distributor within three months of the issue. Your regional electricity distributor is the company that owns the electrical wiring and infrastructure in your area, which may be different to your supplier (who you pay the bills to). FUEL DEBT MASTERCLASS Our North Wales Fuel Debt Masterclass was held at HWB Denbigh on 11 March 2015 with a particular focus on pre-payment. We would like to extend our gratitude to everyone who came and particularly to Tanya Bowyer and Martin Firman of Denbighshire CAB and Andrew Regan of Citizens Advice Cymru for their presentations; and to SWALEC for sponsoring the event. These meetings are free to attend and aim to enable those who have completed our Fuel Debt Advice in the Community course an opportunity to further consider fuel debt advice issues, share good practice and network with other organisations working in this field. Subject to funding, we will look to run two Masterclass sessions again in 2015/16 one in South Wales and one in North Wales and will be in touch with more details in due course. FUEL DEBT ADVICE IN THE COMMUNITY - EXPRESSIONS OF INTEREST Do you work with low income and vulnerable households? Would your organisation benefit from FREE training to help clients struggling with their energy bills?

4 Page 4 of 5 Over the past three years, we have been delivering free fuel debt advice training to frontline workers across Wales as part of a multi-faceted project supported by SWALEC to help low income, vulnerable households struggling with their energy bills. Our one-day Fuel Debt Advice in the Community training course is an ideal introduction for advice workers involved with clients who are in fuel debt or for the more experienced advisor as an update. It aims to give participants a clearer understanding of the pathways involved in resolving fuel debt and covers the main issues including payment options, responsibilities, billing and meter problems, and navigating energy suppliers complaints procedures. We are in the process of reapplying for funding for 2015/16 and are seeking expressions of interest from individuals and organisations who feel that they would benefit from this training in the next financial year. If you or your organisation would be interested in attending this training, please send your name and organisation contact details to Ben Saltmarsh, briefly stating why the training would be relevant to you/your organisation and how you assist low income and vulnerable households. If you would like more information, please Ben Saltmarsh. ONLINE FUEL DEBT DISCUSSION FORUM We have launched an online fuel debt discussion forum for advisors, which has been developed following feedback from those who have attended our Fuel Debt Advice in the Community training courses. It is hosted on our website and we hope that it will help link advisors across Wales, providing them with a platform to share information and ideas on fuel debt advice and find support when dealing with difficult client cases. It is free to join, and to sign up please click this link and follow the on-screen instructions. SPONSOR'S ARTICLE We are almost at the end of another successful year working in partnership with NEA Cymru delivering fuel debt advice courses, masterclasses and community events. The training sessions were well attended by a wide variety of organisations and reached over 120 delegates. In addition, over 150 people received advice through the community events. Over the past 3 years, SSE have worked with NEA Cymru and there are now over 500 members of the Wales Advice Agency network. This is a fantastic achievement and SSE hope to continue the great work over the coming months. REPORTS

5 Page 5 of 5 The poor pay more. A report by Christians Against Poverty (CAP) on prepayment meters. NEA gratefully acknowledges the support of NEA Cymru Room 4E, 4th Floor, 1 Cathedral Road, Cardiff, CF11 9HA NEA is an independent charity, Registration No Company limited by guarantee. Registered in England and Wales No unsubscribe