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The six largest energy companies are profiting from vulnerable customers on the warm home discount scheme by overcharging them on expensive tariffs, First Utility have claimed.
The independent supplier has urged the government to mandate moving all warm home discount (WHD) customers onto their supplier’s cheapest tariff.
Ofgem figures have shown that 97 per cent of warm home discount customers are with a big six provider, and 70 per cent of those are on the standard variable tariff (SVT) and overpaying an average £300 each year. First Utility has estimated that this equates to an overspend of £440 million per year from the 1.5 million households in receipt of the government grant.
First Utility UK managing director Ed Kamm said: “It’s plain wrong that the poorest and most vulnerable are being charged over the odds for their energy. And it’s outrageous that those most in need of financial help to heat their homes this winter, are seeing their Warm Home Discounts fuelling the energy giant’s profits rather than their own hearth.
“We want the government to stop the Big Six energy companies from taking advantage of the Warm Home Discount scheme at the expense of struggling families.”
The work and pensions select committee chair Frank Field supports First Utility’s campaign, and has written to the prime minister to urge her to take action. In his letter he said: “As a next move in protecting the vulnerable human underbelly of British society, the Prime Minister should take the first available opportunity to oblige energy companies to place all of their customers on the cheapest available tariff.”
The WHD was introduced in 2011 to help households who struggle to pay their energy bills and will run until 2021. It requires that suppliers with more than 250,000 customers offer the scheme and give energy poor customers £140 a year in credit.
In October this year Ofgem made changes to the Priority Services Register which now requires suppliers to take all reasonable steps to identify vulnerable customers from January 2017. Eligibility for the register will also be broadened to enable customers to access free services and manage their energy.
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