Publications

The energy regulator, Ofgem, publishes data on the consumption of gas and electricity by typical domestic consumers in GB. These Typical Domestic Consumption Values become industry standards and are used in a variety of different ways by energy suppliers, Price Comparison Websites, and the media. They have also become the benchmark annual consumption value used by Ofgem when it sets the prepayment and default tariff price caps.

The Typical Domestic Consumption Values are based on the total domestic consumption of gas and electricity in GB over a 2-year period and are subject to biennial review.

Having last been reviewed in 2017, Ofgem published its latest review of the Typical Domestic Consumption Values in an open letter to the energy industry and its stakeholders on 18 October 2019. In our response to this consultation, CAS observes that:

• The value of the Typical Domestic Consumption Values to both consumers and suppliers is eroded by the use of GB averages. These hide very significant variations in typical annual domestic gas and electricity consumption between the different regions of GB. The Typical Domestic Consumption Values could therefore be made more relevant were they to be reported as a series of averages by electricity distribution network operator region. This would be consistent with how gas and electricity tariffs are priced in GB.

• For properties with wet electric heating systems and/or supplied via multiple electricity meter points, the aggregation of all multi-rate electricity meter types results in a series of Typical Domestic Consumption Values that significantly misrepresents consumers’ total annual consumption and their peak:off-peak consumption split. With the possibility that the revised Typical Domestic Consumption Values will be integrated into the prepayment and default tariff price caps at a later date, there is a need for a discreet set of Typical Domestic Consumption Values and peak:off-peak consumption splits to be produced for a small number of related multi-rate electricity meter sub-profiles.

• In addition to providing a more balanced and more locally representative price cap, these changes would also allow suppliers to provide consumers with better quality information on how their energy use compares with similar consumers, and better quality, more relevant advice on energy efficiency.

Citizens Advice Scotland (CAS) believes it is more important to get the smart meter rollout right than it is for it to be rushed through to arbitrary deadlines, and we have long been concerned that the 2020 smart meter deadline was so unrealistic that it risked having a negative effect on consumers. In June 2016 we therefore published a report that called for the smart meter rollout to adopt an interim target of 80% smart meter coverage by the end of 2020, with 100% coverage achieved no later than the end of 2025. We reiterated this call in August 2018, and so we welcomed the UK Government’s September 2019 announcement that the smart meter rollout is to be extended to the end of 2024.

This new-found pragmatism provides an opportunity for a review of the targets, incentives and penalties to which energy suppliers will be exposed as the smart meter rollout progresses over the next 5 years. However, it must also be acknowledged that there remain multiple technical barriers to the universal rollout of smart meters, particularly in remote rural areas and for many Scottish households that use traditional electric storage heaters as the primary form of space heating.

These constraints lead CAS to be concerned that consumers reliant on electric heating in Scotland will be among the very last in GB to benefit from the smart meter rollout. Indeed, under current proposals we believe that it would be possible for electricity suppliers to comfortably exceed the proposed post-2020 smart meter targets without a single Scottish consumer with traditional electric heating having benefited from the rollout. This risks placing the costs of maintaining the traditional meter network onto a relatively small customer base, increasing prices for a group of consumers where a majority (52%) already struggle to afford to heat their homes to an acceptable standard.

CAS does not underestimate the significant challenges required to overcome these issues, but we are equally clear that the smart meter policy framework and the regulation of the retail energy market post-2020 must not unfairly burden consumers with additional costs they have no opportunity to avoid. We therefore believe that there may be a need to provide short-term protection for consumers whose ability to access the benefits of smart meters is restricted by the industry's readiness to provide them with suitable metering equipment. We also consider that suppliers could be better encouraged to deliver a market-wide smart meter rollout in all areas of GB if the proposed minimum coverage level were to apply separately in each electricity distribution network area.

While CAS supports proposals to move away from the “all reasonable steps” obligation that currently governs suppliers’ smart meter engagement programs, we are also cautious about the impact of holding suppliers to binding, linear annual targets given the technical barriers referred to above. The Citizens Advice network in Scotland already hears the concerns of consumers who have felt pressured into accepting a smart meter by their energy supplier, and even of instances where attempts to install smart meters have been made by domestic energy supply licence holders that are not the registered supplier at the property concerned. This suggests that while the imposition of installation targets backed by financial penalties for non-compliance may be driving the pace of the smart meter rollout, such targets may adversely impact consumers’ experience of smart meter installation and could jeopardise levels of engagement with the planned transition to a smarter energy future. We believe that suppliers may already be suitably incentivised to encourage their customers to embrace smart meters, and we therefore urge Ofgem to place its post-2020 focus on the enforcement of a high quality customer journey throughout the energy transition.

Andrew Scobie of Perth CAB has carried out a qualitative study to explore how third parties, specifically creditors and health professionals, are responding to the needs and circumstances of indebted citizens with mental health issues.

Our 7th edition in the 'Who Are You?' series describes those coming to citizens advice bureaux in Scotland for advice during November 2018.  

Citizens Advice Scotland has responded to the Insolvency Service's call for evidence on Insolvency Practitioner regulation.

The Capacity Market arose from the UK Government’s Electricity Market Reform in 2014 and is designed to provide assurance that electricity supply can continue to meet demand where, for example, demand peaks coincide with periods of reduced renewable electricity generation.

After being selected on price through a reverse auction process, Capacity Market participants undertake to reduce stress on the electricity system, either by bringing additional generating plant online or by deploying technologies that reduce electricity demand.

To date, the Capacity Market auctions have favoured the provision of additional generating capacity, but this has often been reliant on relatively carbon-intensive forms of electricity generation which run counter to the Government’s ambitions on climate change. In July 2019, BEIS therefore consulted the energy industry and its stakeholders on how it might create new markets for energy efficiency in the electricity system such that it could become a viable alternative to the provision of additional generating capacity or electricity network reinforcement as a means of meeting peak demand.

In our response to this consultation, CAS observes that:

• The Capacity Market may yet prove not be an appropriate route by which to encourage investment in energy efficiency in the electricity market. However, the results of the Electricity Demand Reduction pilot do not definitively show that that energy efficiency is unable to compete in a Capacity Market, and more evidence is therefore needed before firm conclusions can be made.
• The design of Capacity Market should be revised to allow the whole system costs and benefits of a given intervention to be considered when assessing the value of competing bids. This would help to address the competitive disadvantage that electricity demand reduction technologies such as demand side response, flexibility services and energy efficiency face in the Capacity Market, where the carbon intensity of a given intervention is currently not considered.
• Reform of the Capacity Market should seek to take a whole system view of the whole life costs of a given intervention, where competing technologies such as energy efficiency and storage or flexibility services are also seen as complementary to one another.
• The Energy Efficient Scotland program and the development of Local Heat and Energy Efficiency Strategies presents a sizeable opportunity to leverage Capacity Market funding for energy efficiency as a form of electricity demand reduction.

Statistical briefing on advice given; client demographics based on an annual survey of CAB clients undertake for 4 weeks in November 2018 including comparison to SIMD data.

CAS welcomes Ofgem’s proposals to improve outcomes for consumers who experience self-disconnection and self-rationing. We have identified a number of priorities:

• The standardisation of friendly credit dates and hours, where technically feasible
• Improvements to emergency credit provision, which maintains flexibility, but allows for the maintenance of supply in a reasonable worst case scenario
• The removal of barriers to discretionary credit, which maintains protection from excessive debt, but enhances consumer choice
• Improvements in how suppliers communicate with their prepayment customers, for e.g. as regards the seasonal accrual of standing charges
• The formalisation of Ofgem’s Ability to Pay principles in the licence code
• Utilisation of the full suite of smart functionality, for e.g. suppliers switching meters to credit mode to maintain supply
• Viable alternatives to prepayment, for e.g. clarification on the future of Third Party Deductions for energy (Fuel Direct)
• The extension of fuel voucher schemes (fuel credits)