Publication - Consultation paper

Energy Consumers Commission - project plan 2021 to 2022: consultation

Published: 19 Feb 2021

A consultation on the Energy Consumers Commission's project plan covering proposed spending of Scotland's share of the energy advocacy levy for 2021-2022.

Energy Consumers Commission - project plan 2021 to 2022: consultation
5. Projects

5. Projects

5.1 Grassroots organisations

We will take an inclusive, asset-based approach to better understand community involvement in the energy system.

Related themes:

  • Energy Debt
  • Best Practice and Customer Service
  • Improving Outcomes for Vulnerable Consumers
  • Engagement with Decarbonisation

As noted in our previous work plan, grassroots organisations present a route to gaining granular insight into the issues affecting otherwise un-heard energy consumers. However, there are varying degrees of capacity within grassroots organisations as well as differing levels of knowledge of the powers and responsibilities of the various actors within the energy industry.

We have an opportunity to tap into and co-ordinate the information and knowledge available in existing networks. By engaging with grassroots organisations across existing networks to share their knowledge, we can ensure that our goals will more effectively align with the outcomes needed for all Scottish Consumers.

We have begun mapping the landscape of community organisations and we will build on this through talking to community groups to pull together what knowledge, skills and contacts exist.

We will be mindful of grass roots organisations' own priorities but may explore how organisations are currently taking part in conversations and decisions on the energy sector, whether there are opportunities to facilitate greater or more meaningful engagement, or whether there are better ways to co-ordinate the knowledge and action that exists - creating connections where appropriate between the wider social aims of organisations and the work to improve outcomes for energy consumers

5.2 Fuel debt

We will carry out work to better understand how the fuel debt landscape in Scotland impacts consumers and how this interacts with fuel poverty.

Related themes:

  • Energy Debt
  • Supplier Best Practice and Customer Service

The COVID-19 pandemic is envisaged to lead to an increase in fuel debt and fuel poverty in 2021/22 and beyond. Regulatory changes from Ofgem and recommendations from The Scottish Government's Social Renewal Advisory Board have clearly set out the expectation that people in debt in Scotland should be treated fairly and with compassion, providing them advice and support as required; and that appropriate and effective fuel debt mitigation measures are available to all of those most in need of such assistance, regardless of which fuel type they use.

There are existing networks of support available to consumers in Scotland with problem fuel debt. To maximise the effectiveness of this support, and the resultant impacts on energy consumers in Scotland and on levels of fuel poverty, it would be helpful to build a better understanding of what support is available across fuel types, where gaps exist, whether there are opportunities for improvements in the ways organisations work and collaborate and what barriers exist to ongoing access to energy and energy affordability for consumers in Scotland

We will focus specifically on:

  • understanding the relationship between energy debt and fuel poverty
  • understanding the range of available support and/or barriers to fuel debt mitigation' across fuel types

We also believe that grassroots organisations have a key role to play in this area. We will seek to explore how these organisations can be empowered to provide support for consumers in energy debt in the future.

5.3 Consumer vulnerability

We will build on the outcomes of our previous research on Priority Service Registers to explore practical ways that these can be taken forward.

Themes:

  • Improving Outcomes for Vulnerable Consumers
  • Best Practice and Customer Service

Priority Service Registers (PSRs) are records of vulnerable consumers held by suppliers and networks in order to allow priority support to be directed in the case for an emergency (e.g. a power outage) or to offer a range of additional support in regards to existing services.

Linkages between supplier and network PSRs vary and there is significant work being undertaken across Great Britain (GB) into how best to align PSRs and simplify access. Due to comparatively low uptake of PSRs in Scotland in comparison with the rest of GB and the particular profiles of consumers in Scotland, there is a need to understand how well PSRs meet the needs of Scottish consumers in vulnerable circumstances, whether eligibility criteria is appropriate and whether there are other Scottish specific actions that can be taken to promote uptake.

In 2020/21, the Energy Consumers Commission undertook research to establish a baseline understanding of how the experience of utility company priority services varies for vulnerable consumers in Scotland, and to explore whether there is potential to improve or expand upon the services currently offered or the range of vulnerabilities supported.

We will consider the findings of the research and the evidence underlying the recommendations and work in collaboration with the energy and water industries in Scotland, and other interested parties from across GB, on a coordinated response to the issues facing consumers using PSRs. This may include awareness raising, stakeholder engagement and/or further research as appropriate.

5.4 Engagement with decarbonisation

We will raise awareness among consumers directly of the opportunities and impacts of decarbonisation while engaging on high profile events, publications and decisions.

Themes:

  • Engagement with decarbonisation
  • Best practice and Customer Service
  • Improving Outcomes for Vulnerable Consumers

Throughout 2021/2022, a number of significant events are planned that that will impact on consumers' experiences of the energy market and on Scotland's target of achieving net zero emissions by 2045. We are in an excellent position to engage with these opportunities on behalf of energy consumers and to help to engage energy consumers directly, helping to ensure the fairest possible outcome for all consumers including those in vulnerable circumstances.

Key upcoming opportunities in relation to decarbonisation and net zero over 2021/2022 include:

  • COP 26 to be held in Glasgow in November 2021

COP 26 will be an extremely high profile event, bringing attention to the decarbonisation agenda for consumers across Scotland and an opportunity to build on this visibility to drive longer term engagement with net zero in Scotland.

  • The Scottish Government's Heat in Buildings Strategy

The Heat in Buildings Strategy sets out the Scottish Government's actions to ensuring a transition to zero emissions from buildings by 2045. This strategy will require buy in from consumers at all stages.

  • The Heat Networks (Scotland) Bill

This bill will open up opportunities for much greater deployment of heat networks across Scotland. Whilst heat networks are present in Scotland, the move to increase the number of consumers using this technology will naturally require a greater focus on the experience of consumers using this technology.

  • The UK Government Energy White Paper and actions stemming from it

Published in December 2020, the Energy White Paper, sets out a range of actions that will directly impact on consumers in Scotland. These include wider roll out of auto-switching processes and facilitating innovative tariffs in the energy market. We will play an active role in understanding and responding to the effect of these changes on the unique landscape faced by Scottish energy consumers.

We will conduct focused project work on these topics, working holistically and flexibly to ensure that our work achieves the maximum benefit for consumers across a variety of different mediums and to amplify the voice of grass roots organisations in decision making. Work may include focused research, direct engagement with consumers and campaigns.

5.5 Gas and electricity networks

We will continue the work to advocate in the interests of energy consumers in Scotland on the development of the regulated energy networks.

Themes:

  • Improving Outcomes for Vulnerable Consumers
  • Engagement with decarbonisation

The activities of Scotland's regulated energy network operators and the rules around network operation can have significant impacts on the costs paid by consumers, the services they are provided and the opportunities they have to benefit from new technologies or business models. In addition, network operators have a responsibility to empower and protect customers in vulnerable situations, through obligations placed on them in their licences.

In April 2021, a 5-year price control for the gas and electricity transmission networks, the gas distribution network and the Electricity System Operator will commence, representing an opportunity to begin reconfiguring our energy networks for a net zero future, with the first 100% hydrogen network in GB planned for rollout as part of a trial in Levenmouth and significant upgrades to the capacity of the electricity transmission system planned across both of Scotland's transmission network areas, including the connection of Shetland's isolated electricity system to the national grid and additional high voltage direct current connection between Scotland and the rest of GB.

We will engage across the sector to ensure that the interests of consumers in Scotland continue to be represented in the delivery of these investment plans; that networks consider their role in supporting consumers through the energy transition and ensure that the services they provide for vulnerable consumers continue to meet their needs and expectations; that networks engage constructively and help Scotland's local authorities to take a whole energy system view in the design and delivery of Local Heat and Energy Efficiency Strategies; and that communities are effectively consulted, empowered and engaged when major infrastructure upgrades are undertaken.

In June 2021, Scotland's electricity distribution networks will also submit the first draft of their RIIO-2 business plans to Ofgem. Final drafts will be submitted in December 2021, and a series of Open Hearings will be held in Q1 2022 ahead of the start of the next price control in April 2023. Scottish Power Energy Networks, Scottish and Southern Energy Networks and Ofgem will continue to engage extensively with stakeholders throughout this period and, with electricity distribution costs expected to increase significantly as the networks invest to support the rollout of low carbon heat and transportation, it is particularly important that the voice of consumers is heard in the development of these plans.

5.6 Restricted and DTS meters

We will seek to ensure that all consumers with restricted meters in Scotland are adequately protected until a smart metering alternative can be provided, and that consumers are supported with appropriate advice and assistance before, during and after the provision of an appropriate smart meter.

Themes:

  • Improving Outcomes for Vulnerable Consumers
  • Best practice and customer service

The proportion of consumers using non-Economy 7 restricted meters is considerably higher in both of the Scottish electricity distribution licence areas than it is in any other area of GB. In 2020/21, CAS received levy funding to advocate in the interests of energy consumers in Scotland who are supplied through non-Economy 7 restricted electricity meters - including, but not limited to, Dynamically Teleswitched (DTS) meters which make use of the Radio Teleswitch Service (RTS) signal.

The RTS signal is currently due to be retired once the current funding arrangements lapse on 31 March 2023. The withdrawal of the RTS signal could lead to significant financial and non-financial harm to many consumers with DTS meters, and in some parts of Scotland could lead to wider deleterious outcomes as circuits on the distribution networks become overloaded and levels of demand side response are reduced. It will therefore be essential to ensure that all actors within the industry are suitably aware of these risks and that all appropriate measures are taken to ensure that they are fully mitigated. We will raise awareness of these issues and may advocate for funding for the RTS signal to be extended beyond the current terminal date and encourage a high degree of co-ordination between the smart meter rollout in Scotland and the planned withdrawal of the RTS signal. Supplier preparation plans for RTS phase out will need to be probed and influenced accordingly.

More broadly, in 2017 Ofgem introduced a series of measures that were designed to increase competition and choice for consumers with non-Economy 7 restricted meters following the CMA's finding of a series of real and perceived barriers to switching among a consumer profile that is particularly prevalent in Scotland. However, while the CMA's modelling suggested that up to 80% of non-Economy 7 restricted meter users in Scotland could benefit financially from these interventions, in practice engagement with the Restricted Meter Remedy has been low and supplier compliance has been mixed[3]. In addition, the exclusion of prepayment meter customers from the provisions of the Restricted Meter Remedy means that many of the most vulnerable non-Economy 7 restricted meter users in Scotland gain no benefit from Ofgem's interventions, a situation compounded by changes to the prepayment meter price cap methodology in 2019 which resulted in significant increases in the typical energy costs incurred by such consumers as well as an industry-wide shortage of replacement meter stock which prevents many consumers with prepayment non-Economy 7 restricted meters from changing to credit meters.

We will explore the above issues, highlighting the needs of Scottish consumers and opportunities to improve outcomes.

5.7 Consumer experiences tracker

We will continue to ask consumers in Scotland about their experiences with their energy supply, sharing insights and raising awareness of opportunities for improvement.

Themes:

  • Best practice and customer service
  • Improving outcomes for consumers in vulnerable circumstances

In 2020/21, we undertook research to establish a baseline understanding of the experiences of consumers in Scotland in the regulated and unregulated energy markets. This year we will continue that research while using the outcomes of the previous survey other available evidence to draw attention to, and encourage the sharing of, best practice across the energy sector.

The COVID-19 pandemic has highlighted already existing disparities between energy suppliers in terms of customer service, with some suppliers offering adequate, accessible communications and/or support for consumers struggling to pay their energy bills and others refraining from matching this level of support. There is less information available on the experiences of consumers in the unregulated energy markets, the support received by consumers varies depending on a range of factors and our ongoing work will explore the needs of these consumers.

We will work to understand the issues that matter to consumers and work collaboratively with other organisations who are seeking to achieve complementary goals. We will engage with representatives from across the energy industry to highlight areas of best practice and opportunities for improvement, as identified by our research and by organisations with which we work. Appropriate responses to the ongoing impacts of the Covid pandemic will be a key area of interest.

As part of this work we will seek to bring together grassroots organisations, community groups and advice agencies from across Scotland to co-ordinate the sharing of intelligence and dissemination of knowledge on supplier performance in both the regulated and unregulated energy markets. We will explore the language of consumer detriment throughout the energy sector - aiming to move towards a shared understanding of detriment applicable across organisations at various scales to simplify cross-organisation working and address consumer detriment more effectively and quickly.

Consultation Questions

2. Are these the correct areas of focus for project work to improve outcomes for consumers in Scotland?

3. Are these projects relevant to the ECC's continuing themes of energy debt, engagement with decarbonisation, supplier best practice and support for consumers in vulnerable circumstances?

4. Do you have any further comments?


Contact

Email: ConsumerandCompetition@gov.scot