Asked by: Graham Leadbitter (Scottish National Party - Moray West, Nairn and Strathspey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what discussions he has had with (a) OFGEM and (b) energy companies on VAT inclusion in (i) energy billing documents and (ii) online quotes for consumers.
Answered by Miatta Fahnbulleh - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
My Rt. Hon. Friend the Secretary of State and I have regular meetings with Ofgem on a range of issues.
Quotes on energy pricing and how those quotes are broken down for customers are a matter for energy suppliers. However, the Government takes the issue of accurate billing very seriously. All suppliers must take all reasonable steps to reflect accurate meter readings in bills or statements sent to customers where these have been provided by a customer or obtained by the supplier. This is laid out in the Supplier Licence Conditions (SLCs) for both electricity and gas.
Under 31E.10 of both sets of SLCs where the licensee provides a Domestic Customer with any information about the Charges for the Supply of Electricity, gas or any other type of charge or fee (the “Applicable Charges”), the licensee must inform the Domestic Customer of whether the Applicable Charges include or exclude value added tax.
Asked by: Graham Leadbitter (Scottish National Party - Moray West, Nairn and Strathspey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, whether the status of a managing factor as a limited company affects the classification of a communal electricity supply as domestic or business; and what guidance his Department provides to Ofgem and energy suppliers on this matter.
Answered by Miatta Fahnbulleh - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The classification of whether a communal electricity supply is considered domestic or business depends on whether the organisation or individual who manages the building has a domestic or commercial energy contract. Businesses are required to have a commercial energy contract, even if they provide electricity to domestic properties.
Ofgem provides guidance to consumers on whether they need a business energy contact on its website - https://www.ofgem.gov.uk/information-consumers/energy-advice-businesses/get-energy-your-business.
Asked by: Graham Leadbitter (Scottish National Party - Moray West, Nairn and Strathspey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what steps he has taken to protect residential consumers from being charged Business Rate electricity tariffs for communal areas; and what mechanisms exist to challenge such classifications.
Answered by Miatta Fahnbulleh - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Communal areas in apartment blocks are charged on a non-domestic energy contract as the organisation who is responsible for them is a business.
A Call for Evidence regarding domestic customers with a non-domestic energy supply was published in July 2023 and explored the advantages and disadvantages of these arrangements. The responses highlighted the complexity of energy supply and contract arrangements, and due to the physical set-up of these residences, the majority of these consumers will continue to receive their energy via a non-domestic contract. The Call for Evidence is now closed, and a summary of responses was published in April 2024.
Ofgem is taking action to ensure these consumers are protected by raising awareness of the Maximum Resale Price direction, and planning work with network companies to produce a clear route for vulnerable consumers to be added to the Priority Services Register.
Asked by: Graham Leadbitter (Scottish National Party - Moray West, Nairn and Strathspey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, whether his Department plans to review the practice of applying business energy tariffs to communal electricity supplies in residential buildings.
Answered by Miatta Fahnbulleh - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Communal areas in apartment blocks are charged on a non-domestic energy contract as the organisation who is responsible for them is a business.
A Call for Evidence regarding domestic customers with a non-domestic energy supply was published in July 2023 and explored the advantages and disadvantages of these arrangements. The responses highlighted the complexity of energy supply and contract arrangements, and due to the physical set-up of these residences, the majority of these consumers will continue to receive their energy via a non-domestic contract. The Call for Evidence is now closed, and a summary of responses was published in April 2024.
Ofgem is taking action to ensure these consumers are protected by raising awareness of the Maximum Resale Price direction, and planning work with network companies to produce a clear route for vulnerable consumers to be added to the Priority Services Register.
Asked by: Graham Leadbitter (Scottish National Party - Moray West, Nairn and Strathspey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what assessment his Department has made of the potential implications for his policies of practice of classifying communal electricity meters in residential buildings as business rather than domestic; what steps he has taken to ensure fair and consistent application of tariffs; whether energy suppliers are permitted to override a meter’s designation as Domestic in the National Database when setting tariffs; and what steps his Department is taking to prevent incorrect classification.
Answered by Miatta Fahnbulleh - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Communal areas in apartment blocks are charged on a non-domestic energy contract as the organisation who is responsible for them is a business. As such, domestic consumers living in the apartment block are usually charged a non-domestic energy rate for these areas. Ofgem’s Maximum Resale Direction protects tenants from being charged inflated electricity costs from their landlord. It sets a maximum price that can be charged for electricity and gas which has already been bought from a licenced supplier.
Suppliers are ultimately responsible for correctly classifying the customers they contract with as domestic or non-domestic, in line with Ofgem criteria. Suppliers are also responsible for the correct classification of electricity meters, in accordance with ‘meter profile classes’ managed by Elexon in the Balancing and Settlement Code (BSC).
Ofgem has made clear in guidance on this subject that ‘meter profile class’ should not be the deciding factor in whether a customer is domestic or non-domestic, this should be based on the intended purpose of consumption at the premises (i.e. domestic or non-domestic) Bespoke contracts should be offered where needed
Asked by: Graham Leadbitter (Scottish National Party - Moray West, Nairn and Strathspey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what assessment his Department has made of the potential impact of hydrogen production on land-locked bodies of water.
Answered by Sarah Jones - Minister of State (Department for Energy Security and Net Zero)
The Department for Energy Security and Net Zero works collaboratively with other government departments and relevant regulators to understand the water impacts of a developing hydrogen economy, including the potential impact of abstraction on water bodies.
The Government expects all planned hydrogen production projects to have robust plans in place for sustainable sourcing of water that comply with relevant regulations.
Asked by: Graham Leadbitter (Scottish National Party - Moray West, Nairn and Strathspey)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what discussions he has had with DCC to ensure there will be alternate smart meter connections in rural areas.
Answered by Miatta Fahnbulleh - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The Data Communications Company (DCC) is required to assess opportunities to increase the overall level of communications network coverage for Great Britain beyond its currently provisioned minimum level of 99.25%.
The DCC are examining a number of options to reach homes not currently able to get smart metering network coverage as part of its Future Connectivity strategy, which includes consideration of a full range of technical solutions including cellular options.