The Petition of concerned energy users in the Highlands and Islands,
Declares that the below Petitioners are concerned about the energy costs faced by households without access to the gas main, and the large rise in numbers facing acute fuel poverty this winter.
The Petitioners therefore request that the House of Commons urges the Government to target emergency financial help at those who rely on heating oil, LPG or solid fuel to match the support currently provided through the six biggest gas and electricity providers.
And the Petitioners remain, etc.—[Presented by Mr Charles Kennedy, Official Report, 10 March 2010; Vol. 507, c. 400 .]
[P000752]
The Petition of concerned energy users in the Highlands and Islands,
Declares that the below Petitioners are concerned about the energy costs faced by households without access to the gas main, and the large rise in numbers facing acute fuel poverty this winter.
The Petitioners therefore request that the House of Commons urges the Government to target emergency financial help at those who rely on heating oil, LPG or solid fuel to match the support currently provided through the six biggest gas and electricity providers.
And the Petitioners remain, etc.—[Presented by Danny Alexander, Official Report, 10 March 2010; Vol. 507, c. 400 .]
[P000753]
Observations from the Secretary of State for Energy and Climate Change:
The Government have sympathy with the difficulties faced by off-grid energy consumers, which is why we are committed to seek to extend protection and support to off-grid energy consumers. This will need to be achieved in a way that is affordable in the current financial climate.
Around 13% of households in England, 19% in Wales, and 12% in Scotland do not have access to the gas network, these customers rely on fuels such as mains electricity, heating oil and Liquefied Petroleum Gas (LPG) to heat their homes. Higher heating costs means that off-gas households have a higher propensity to be fuel poor, latest statistics suggesting that around 23% of off-gas grid households are fuel poor compared with around 12% of households that have a gas connection.
The recent rise in the price of heating oil and LPG around the world is a cause for concern for many customers off the gas grid. This year we have witnessed an increase in the price of heating oil, both wholesale and retail. The evidence we have shows that recent rises in heating oil prices have been broadly in line with rises in the cost of crude oil, from which it is obtained. There have recently been changes to address issues in the LPG market. As a result of concerns about competition in the market for domestic bulk LPG, the Office of Fair Trading (OFT) made a market investigation reference to the Competition Commission (CC) in July 2004. In June 2006, the CC published a report which said that difficulties in switching supplier have inhibited competition. The CC has subsequently devised a package of remedies and has imposed them through two Orders on the industry. The changes were intended to make it easier to switch supplier, and to address the issue of price transparency, as LPG suppliers are required by Orders to provide price quotes on their web sites and by telephone to consumers. The two Orders implementing these remedies have now come into force, and the OFT is monitoring their effectiveness.
There are currently various other ways in which support has been provided to vulnerable consumers and those not connected to the gas grid. The current voluntary agreement with the big six energy suppliers, under which they provide discounted tariffs, known as social tariffs, means that vulnerable customers who are eligible for these tariffs and who may also be off the gas grid, can receive help with their bills from their electricity supplier. Extending the voluntary agreement to the LPG, heating oil and solid fuel markets could be potentially damaging in the light of current market conditions. It would require distributors to price their fuel at well below cost for eligible customers, and the cost of the tariff may need to be subsidised by other consumers paying already high prices. There could also be unintended consequences, for example companies withdrawing from the market to concentrate on other areas such as jet fuel supply. This risks reducing competition and could lead to higher prices for consumers. Ofgem have made some progress in their endeavours to connect vulnerable households to the gas network. Through the pricing round that they regulate, Ofgem have encouraged the large Gas Distribution Networks (GDNs) to connect deprived communities to the network. All four GDNs have now set up partnership agreements with agencies that help deliver energy efficiency programmes. This will allow the network to be extended to households in fuel poverty and homes within the priority group for the Carbon Emissions Reduction Target (CERT) provided they are within a gas network owners licence area. This includes the Highlands, but unfortunately not the islands as they are not within a gas network area. In total up to 20,000 households could be connected between now and 2013 via this scheme. In addition to gas connection these partnership arrangements will provide help and financial support for central heating and other energy efficiency measures.
These are important steps but the Government recognise that more needs to be done. Going forward we will be considering a number of different ways to help people off the gas grid, particularly those who are fuel poor. Options to be explored include the further roll out of household energy efficiency measures and/or proposals to promote renewable heating.
I am grateful to the petitioners for raising the issue of the costs faced by consumers off the gas network, they may rest assured that the Government share their concerns and are determined to ensure all energy consumers get a fair deal.