How RIIO-2 can be strengthened to ensure network companies take the moments of opportunity to protect customers in vulnerable situations

21/03/2019

 Chris Tate, Consultant

I have been working with AgilityEco, considering the role of the gas and electricity distribution network companies, in providing help and support to customers in vulnerable situations. We’ve been thinking about how this agenda should be strengthened in RIIO-2. We passionately believe that the network companies should have firm obligations and proper funding through the price control, to use the moments of opportunity where they come into contact with their most vulnerable customers. The points below have formed the basis of AgilityEco’s response to the Ofgem RIIO-2 consultation, submitted last week (Thursday 14th March). 

AgilityEco provides a market-leading range of support services to fuel poor and vulnerable households, in many cases funded by energy suppliers through their social obligations and now network companies are playing an increasing role.

RIIO-2 is an invaluable opportunity to help shape the approach of network companies, to maximise benefits and impacts and to drive a joined-up approach across the energy industry.

We welcome Ofgem’s focus on consumer vulnerability in RIIO-2, but there are a few key areas where we believe the controls could be strengthened:

  • The proposed funding for the ‘use it or lose it’ allowance (£15m - £30m over the whole price control period) is entirely inadequate to have a meaningful impact to deliver the outcomes of the Ofgem’s Consumer Vulnerability Strategy and needs to be increased substantially.
  • It’s unacceptable to leave a vulnerable household unsupported, in cases where gas supplies or appliances have been disconnected for safety reasons when a gas leak has been reported.  GDNs should have a firm obligation and appropriate funding through the price control, to get the problem resolved, replace appliances and get the supply re-instated.
  • The GDNs are in a strong position and should be incentivised to help vulnerable customers access ECO, Warm Homes Fund, Local Authority and other funding for energy efficiency and advice, as they are aware of the need and the eligibility. Through cross sector partnership working, this will deliver much more comprehensive and impactful support to vulnerable customers, with more effective targeting and resulting in better coordination of government schemes.

We believe that there should be greater emphasis on GDNs to better utilise their key touchpoints to offer holistic support both directly and through a network of specialist partner agencies.

  • Fuel Poor Network Extension Scheme (FPNES): Many fuel poor off-grid households miss out on the FPNES scheme, because they cannot afford the installation of effective heating thereafter. We believe the GDNs through the price control mechanism, should match fund schemes such as ECO and other national and local funding (which falls substantially short of the installation cost) to help fuel poor and vulnerable householders with first time central heating installation costs. In addition, by integrating energy efficiency and related support at the point of connection, it allows a whole house approach solution and significant work to be done in one event, savings on costs to re-engage at a later time.
  • Carbon monoxide and safety awareness: GDNs should work with the Fire Services and other authorised organisations to prevent CO poisoning and educate on the dangers. They should also protect customers in vulnerable situations, such as those with dementia, by fitting other safety devices such as locking cooker valves where appropriate.
  • Responding to emergencies: As well as identifying vulnerable customers and providing priority services, more focus should be given to provide inclusive communication and a wider tailored care package responding to particular individual needs.       
  • Reaching out to customers in vulnerable circumstances during planned and unplanned outages: We believe GDNs have a role to play to provide a more holistic support service to achieve long-term outcomes.  This could include triaging people’s needs through home visits for the provision of energy saving advice, maximising income and wider essential welfare support.

AgilityEco delivers a number of initiatives in partnership with network companies, examples include:

  • LEAP service - offering customers in vulnerable situations a home visit for energy advice and measures and referrals to appropriate services including an income maximisation service.
  • FPNES and First time central heating - GDNs have been providing matched funding to hit their FPNES targets.  AgilityEco works in partnership to target effectively to deliver the FPNES obligation and install first time central heating.         
  • Vulnerable Customer Voucher Scheme -  one GDN has admirably been funding this scheme voluntarily to help with repair and replacement of unsafe broken appliances following emergency disconnections.

With additional funding and cross-sector partnership working, these could be replicated and expanded to deliver comprehensive and holistic support.

GDNs could adopt AgilityEco's joined-up approach to partnership working with local authorities, suppliers and outreach organisations.

It may be advisable to develop a single national framework, to co-ordinate and optimise all regulated obligations and available funds, such as ECO, Warm Homes Fund and the Warm Home Discount. This approach may be worth considering for the ‘use-it-or-lose-it’ allowance.