As winter approaches, UK worries about energy poverty

With energy bills for the average UK resident rising dramatically this summer, politicians and citizens alike have been looking ahead toward the winter months with growing apprehension.

Writing in a guest commentary on the site MoneySavingExpert.com this week, Prime Minister David Cameron and Energy and Climate Secretary Chris Huhne noted that energy bills for most people in Britain had gone up by more than £100 in recent months.

“These price rises couldn’t come at a worse time for consumers who are already feeling the pinch from rising petrol prices and the cost of the weekly shop,” they added.

With colder weather and even higher bills on the way, leaders convened a Consumer Energy Summit this week to discuss ways to keep that pinch from becoming even more painful. The meeting — which brought together government officials, consumer groups, energy suppliers, and representatives from the energy industry regulator Ofgem — ended with recommendations for a variety of strategies to go into effect either immediately or in the short term.

They include:

• A new website — Check, Switch, Insulate to Save — offering advice to help people take steps like changing energy providers to take advantage of cheaper rates;
• New funding for Energy Best Deal, an energy-company-supported savings program launched in 2008 by Ofgem and the charity Citizens Advice;
• Plans for a “Big Energy Week” campaign by Citizens Advice;
• Letters from energy suppliers to go out “urgently” to eight million quarterly credit customers who could save money by changing their payment method;
• Better energy billing to provide customers with information on how to save money;
• A December mailing to four million of the nation’s “most vulnerable” energy customers telling them they are eligible for free or heavily discounted insulation to their loft or cavity walls.

Getting just 1 percent of the most vulnerable customers to insulate and switch to a cheaper supplier could save around £12 million in energy bills, according to the Department for Energy and Climate Change (DECC). In fact, changing suppliers can cut some dual electricity-gas bills by up to £200 a year, though fewer customers have taken advantage of that recently.

According to Ofgem, only 15 percent of households switched gas supplier in 2010 and just 17 percent switched electricity suppliers. Both those figures are down from levels seen in 2007: 20 percent for gas and 19 percent for electricity.

“Vulnerable customers need all the help they can get to get the best deal,” said Sarah Harrison, Ofgem’s senior partner for sustainable development. “Ofgem is pushing forward with reforms to the retail market which will make choosing a better deal easier for all consumers by removing complex tariffs. Easy-to-understand prices will help make Energy Best Deal even more effective at helping vulnerable consumers.”