Improving energy services for people living in vulnerable situations

How can the market help such a diverse group?

Anybody can find themselves in a situation where they’re less able to represent their interests, or are more likely to suffer detriment, than a typical consumer.

Examples could be people living on low incomes, pensioners, single parents or people who live in rural areas. In energy markets, these situations may be very temporary, like a short illness, or may last for a long time, like a long-term health condition.

The energy regulator Ofgem has made clear that it wants customers to be at the heart of the next round of planning for the energy network companies, meaning customers in vulnerable situations should see improvements in service.

We’ve blogged before about how important it is that the government does more to help people in vulnerable situations keep their homes warm. Here we explore how the energy market can help in other ways.

The role of energy network companies

Energy network companies — private firms that own the pipes and wires that deliver our gas and electricity — have a unique role in supporting people in vulnerable situations.

If you have a power cut, or your gas supply is interrupted, it will probably be a network company that will help to get your energy reconnected. For some people, getting access to energy can be critical, for example if you rely on a ventilator or a dialysis machine. For others, getting a hot meal may be the priority.

It’s not just in these emergency circumstances that network companies play a crucial role in supporting people in vulnerable situations.

These companies should consider the needs of all their consumers. For example, someone who is living with dementia may need help using gas safely in their home, and network companies also need to think carefully about how to inform such consumers ahead of planned engineering work to ensure their needs are met.

How can these services be improved?

Energy network companies are regulated by Ofgem under a framework called RIIO (Revenue = Incentives + Innovation + Outputs).

The next phase of this, called RIIO-2, will start in 2021 and presents a significant opportunity to improve the services provided by network companies for people living in vulnerable situations.

In 2018, we worked with a group of consumer organisations to better understand how RIIO-2 can deliver better outcomes for people.

Taking this further, last month we published a collection of essays — from different consumer organisations — on how RIIO-2 can deliver improved support for people in vulnerable situations. These essays cover a range of ideas, from introducing a standalone vulnerability incentive to taking a more holistic approach to the support offered to consumers in fuel poverty.

Ofgem is currently making key decisions on how network companies will be encouraged to meet the needs of people in vulnerable situations, and the recommendations in these essays offer a range of practical ideas to guide its plans.

Next steps

Network companies have done a lot in recent years to improve the service offered to people in the most vulnerable situations.

However, with 11 million people in the UK living with a limiting mental or physical disability, a stronger consumer perspective is needed for these priority customers if RIIO-2 is to adequately meet their needs.

As the statutory watchdog for energy consumers in Great Britain’s energy markets, we’re well placed to advocate for such change. In the critical months ahead, we’ll be working with consumer organisations, Ofgem and the network companies to ensure that RIIO-2 delivers ambitious improvements for people living in vulnerable situations.