The petition of residents of Linlithgow and East Falkirk,
Declares that concerns about the Thermal Flow Wet Electric Heating System that was installed in homes 2010/11 have reached an unacceptable level; notes that the unaffordability of the tie-in tariff has added food poverty and serious physical and mental health implications to fuel poverty suffered by those affected; also notes the resistance of Scottish Power, Neat Heat and Falkirk Council to address the problem; and further notes the wider implications of excessive UK energy costs.
The petitioners therefore request that the House of Commons urges the Government to liaise with Scottish Power to resolve this long-standing issue in any way possible; enforce accountability and recompense to those adversely affected; and consider legislation to energy prices.
And the petitioners remain, etc.—[Presented by Martyn Day, Official Report, 27 January 2020; Vol. 670, c. 642.]
[P002553]
Observations from the Minister for Business, Energy and Clean Growth (Kwasi Kwarteng):
The Department recognises the distress that these issues may have caused to the residents of Linlithgow and East Falkirk, and it is right they be resolved as quickly as possible. To that end, the Department has engaged with Scottish Power, and they state that they have taken a series of steps to address these issues.
We have been advised that once senior management at Scottish Power became aware of the issue (November 2019), the CEO initiated engagement with the Community Group leaders via telephone as well as attending a meeting at Falkirk Municipal Hall.
Scottish Power have confirmed that they then took the followings actions to support customers in reducing their electricity consumption and bills:
They introduced a new fixed price tariff for credit meter customers on the Domestic & Economy 2000 meter type (further detail below).
They provided winter credits for prepayment customers on the Domestic & Economy 2000 meter type in the Falkirk area (further detail below).
They produced and sent out an information leaflet to help customers use their heating system more efficiently—thus helping them reduce their electricity usage and bills.
Customer Liaison Officers (CLOs) have been visiting numerous customers’ homes with these heating systems in and around the Falkirk area. To date over 150 homes have been visited, and more visits will be undertaken when and where it is safe to do so, given current circumstances with covid-19. At these visits, CLOs have reviewed the property/heating system and provided more personalised advice for customers on the measures that may be available to them to help reduce their energy use and/or bills.
They continue to work with Falkirk Council to build a sustainable and meaningful partnership which will incorporate all potential funding routes available from Scottish Power, Falkirk Council, the Scottish Government’s Warmer Homes Scotland programme and other funding sources. Scottish Power has made a £1 Amillion fund available for energy efficiency and insulation measures can help customers reduce their overall energy costs.
Scottish Power has also introduced a dedicated telephone number for customers who have specific queries such as wanting to move tariff or arrangements for a CLO visit.
We have been advised that Scottish Power has also taken additional steps in addressing high electricity usage and price tariff design.
Scottish Power confirmed that a large proportion of householders in Falkirk have what Scottish Power consider very high electricity consumption levels—up to three times the level that Ofgem would class as a “high user” for Economy 7; where the current Ofgem definition of “high user” for Economy 7 (Profile Class 2) = 7,100kWh per annum.
They also confirmed that the new fixed price tariff is designed with higher electricity users in mind, offering a lower price on the control/heating price which is fundamentally where the high usage stems from.
Further to this, Scottish Power has implemented winter credits for prepayment customers to provide support through periods that heating consumption is highest. The level of credit is tailored to the householders’ electricity usage. The calculated saving that each customer would be forecast to achieve on the direct debit equivalent version of the new fixed price tariff over the winter period (December to February inclusive) versus their current prepayment prices.
Scottish Power aimed to ensure the first credits were issued prior to Christmas, recognising the cash pressures that customers may have faced over the Christmas and new year period, and credit payments were made to customers during December and January.
Additionally, recognising the recent severe weather further credit payments of £50 per customer were awarded to each of the same prepayment customers.
Scottish Power suggest that they have received queries from consumers regarding single rate electricity meters, which could find cheaper tariffs elsewhere; however, Scottish Power noted that against a single rate tariff (where the customer does not actually require a meter change as all suppliers are obligated to be able to support their existing meter types with a single rate tariff variant), the new fixed price tariff is well-priced for these higher electricity users, who are using most of their electricity consumption on heating.
The Department recognises that although domestic energy suppliers offer a range of tariffs to multi-rate meter customers, the period of peak and off-peak times offered and the unit rate charged may vary for each tariff. In some cases, multi-rate meter consumers’ electricity supply for heating and hot water systems will be hard wired to the meter and charged at a cheaper electricity rate. While electricity used for lighting and cooking etc, is charged at a separate higher rate. Some suppliers’ billing and accounting systems have found it difficult to support this type of metering arrangement and/or to match the terms of individual multi-rate tariffs. Smart meters will help to eradicate these problems.
In 2014, the Competition Market Authority (CMA) looked at the restrictions some multi-rate meter customers faced as part of it’s in depth investigation into the energy market. In September 2017 the CMA ordered all energy suppliers with more than 50,000 customers to offer their single-rate tariffs to customers with a restricted multi-rate meter. The provision would enable these customers to switch supplier while keeping their existing meter until a smart meter could be installed. Suppliers were also ordered to provide regular information of their single-rate tariffs to the Citizens Advice Service, to enable the charity to provide an unique advisory service to help multi-rate meter customers calculate which type of tariff best meets their energy demands, their existing multi-rate or a single-rate tariff.
We will continue to monitor the action that has been taken in relation to the issue. More generally, at the current time, we are also working with energy suppliers to ensure that vulnerable customers who are finding it difficult to manage their energy bills during the disruption caused by covid-19 are supported.