WIREDGOV

. Much good practice identified in suppliers’ procedures but more must be

. done to prevent the vulnerable being disconnected

. Rapid reconnection for vulnerable customers inadvertently disconnected

Proposals to beef up safeguards to protect vulnerable customers from disconnection are published today by the energy regulator Ofgem. The proposals follow a joint review with Consumer Focus that was prompted by evidence from the Consumer Focus Extra Help Unit of a number of disconnections of vulnerable households last winter. The review found that while there is much good practice across energy suppliers to protect vulnerable customers from disconnection, there is still room for improvement.

Sarah Harrison, Ofgem’s Senior Partner for Sustainable Development, said: “This thorough review by Ofgem and Consumer Focus shows that, while suppliers’ procedures in this area are generally sound, improvements can be made. Ofgem is proposing changes to the existing rules to ensure that the regulatory framework in this area is fit for purpose and is working with suppliers and the Energy Retail Association (ERA) to ensure elderly and other potentially vulnerable customers are better protected ahead of the forthcoming winter.”

Audrey Gallacher, Head of Company Performance and Consumer Experience at Consumer Focus, said: “The impact of disconnection on a vulnerable home is devastating. We hope energy suppliers will take these initiatives on board to ensure they do not disconnect vulnerable people this winter.”

Key outcomes of the review:

. A number of changes being made by suppliers to sharpen and improve the industry’s own “Safety Net” arrangements that protect vulnerable customers from disconnection. As a part of this suppliers have committed to improvements in how they deal with customers with mental health problems. This is being backed up by tougher audit arrangements being put in place by the ERA to check suppliers are keeping to the Safety Net commitment.

. Ofgem is proposing to change current supply licence conditions to oblige suppliers to investigate proactively the customer’s circumstances to establish they are not vulnerable before they disconnect them (see note 2).

. A commitment from all suppliers to re-connect within 24 hours a customer who has been disconnected who subsequently turns out to be vulnerable. Suppliers have also committed to follow up any customer who has been disconnected and who has not made contact to check again that they are not vulnerable.

The review examined British Gas’ dealings with customers seeking reconnection after being cut off for meter tampering and found they were lagging behind the rest of the industry, particularly in their treatment of vulnerable customers in such cases. British Gas have now made improvements to address the concerns we raised.

Notes to editors:

1. See the full report, Review of protection for vulnerable customers from disconnection, here: http://www.ofgem.gov.uk/Sustainability/SocAction/Publications/Pages/Publications.aspx

2. Current supply licence obligations: energy suppliers are prohibited from disconnecting certain categories of vulnerable customers in certain circumstances:

. they must not disconnect a domestic premise during winter where they know, or have reason to believe, the customer is a pensioner and only lives with other pensioners or those aged under 18;

. They must also take all reasonable steps to avoid disconnecting in winter households where the occupants include someone who is of pensionable age, disabled or chronically ill.

The proposed amendment will compel suppliers to check proactively the customer is not vulnerable before disconnecting.

3. ERA Safety Net: ERA established a voluntary Safety Net in 2004 that gave a commitment from industry not to knowingly disconnect a vulnerable customer. ERA will now review and strengthen this document to ensure that suppliers act consistently to identify the vulnerable. The Safety Net definition includes: households on low income/state benefit with young children, and; people dependent on medical equipment run by electricity, such as an electric wheelchair or dialysis machine.

4. On average, indebted customers who have progressed through a suppliers’ “debt path” to disconnection will have been contacted around nine times by their supplier – including five letters, two outbound phone calls and at least one visit to the premises where the supplier checks for any signs of vulnerability and attempts to establish contact with the customer. The review highlights examples of good practice that we have identified from all the Big Six energy suppliers (British Gas, EON, EDF Energy, Npower, Scottish Power and SSE).

5. The review published today is a part of a wider review of energy suppliers’ debt management and prevention practices Ofgem is carrying out with Consumer Focus that will be completed by the end of 2009.

6. This review is a key part of Ofgem’s Social Action Strategy which sets out how we seek to meet our social responsibilities and help Government tackle fuel poverty: http://www.ofgem.gov.uk/Sustainability/SocAction/Documents1/SAS%202009.pdf

7. Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's powers and duties are largely provided for in statute, principally the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000, the Competition Act 1998, the Enterprise Act 2002, the Energy Act 2004 as well as arising from directly effective European Community legislation.

For further press information contact:
Consumer Focus: Patricia Ockenden 020 7799 8006
Ofgem: Alison Wright 0207 901 7217 / 07771 980297