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Consumer coalition sets out RIIO-2 vulnerability proposals

A coalition of consumer organisations has today come together to outline how Ofgem can deliver on its commitment to improve protections for consumers in vulnerable circumstances in the RIIO-2 price controls.

The proposals are outlined in a collection of essays by authors from Citizens Advice, Citizens Advice Scotland, Sustainability First, Centre for Sustainable Energy and National Energy Action.

The essay collection is being released ahead of Ofgem’s much anticipated RIIO-2 sector specific consultations. The consultations will begin to clarify the fundamental ways in which the UK’s energy networks will be regulated from 2021 onwards.

Energy networks have done much in RIIO-1 to improve the service offered to consumers in the most vulnerable circumstances. However, the essays’ authors argue that, 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 the RIIO-2 price control is to adequately meet their needs.

Gillian Cooper, Head of Energy Policy at Citizens Advice, said:

“We fully support Ofgem’s ambition to deliver better outcomes for consumers in vulnerable circumstances in RIIO-2.

“Ofgem will soon be making key decisions on how energy networks will be incentivised to support consumers in vulnerable circumstances from 2021. The recommendations in this collection offer a range of practical ideas to guide Ofgem’s plans.

“We look forward to continuing our work with Ofgem and the energy networks, to ensure that RIIO-2 delivers the best possible outcomes for energy consumers living in vulnerable circumstances.”

Essay proposals

  • A standalone vulnerability incentive – which would reward networks if they planned certain work around vulnerability and could evidence improvements for those customers.
  • Enhanced Stakeholder Engagement and Consumer Vulnerability (SECV) incentive – which would reform the existing SECV and reward networks if they evidenced real consumer benefits e.g. fuel bill savings or increased comfort and warmth.
  • Linking innovation funding to vulnerability objectives – this would ensure that future innovation funding (Network Innovation Allowances or Network Innovation Competitions) is reformed to directly include measures to support consumers in vulnerable circumstances in the transition to a low-carbon future.
  • A ‘no one left behind’ principle for the transition to a low-carbon economy – Ofgem could work to ensure more consumers in vulnerable circumstances are able to fully participate with smart energy services. And that licensed businesses adequately protect them from undue costs e.g. network upgrades.
  • A more holistic approach to the Fuel Poor Network Extension Scheme (FPNES) – this would give networks more flexibility to enable them to help people heat their homes effectively, without necessarily having to upgrade the network.

The full essays can be found here.

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