Energy market needs ‘level playing field’ to help vulnerable

Energy retailers regardless of size should be held to the same standards when it comes to social obligations, EDF’s former customer services director has said.

Steve Hayfield was speaking following his recent appointment as chief executive of Charis Grants, an organisation which manages funds and grants on behalf of major utilities. The Peterborough-based company has recently undergone a rebrand to better reflect its vision, bringing in the former big six director to lead its next phase of growth.

Speaking to Utility Week Hayfield highlighted how historically larger suppliers have diverted consumer credit balances they have been unable to refund in order to support their vulnerable customers, something which he believes is not universally done across the market.

He also expressed concerns that the warm home discount was viewed in a negative light by some industry stakeholders.

He said: “When you look at the warm home discount, industry initiatives are a great vehicle to provide help, in particular some sort of debt support or relief for those facing hardship. In the past some stakeholders have viewed this kind of support as almost a dirty thing to do, because it simply writes off debts and therefore must be benefiting suppliers in their profit and loss accounts.

“The reality is that actually there is a sustainable benefit for customers who are struggling and it is a responsible way of helping people, I think it’s so important for Ofgem and the government to really think about this in the next years of the warm home discount industry initiatives.

“They should level the playing field for all suppliers because I think there are obligations and commitments that some of the large suppliers of old have made to Ofgem to divert additional funds to help vulnerable people beyond warm home discount. That’s not true of all suppliers however.”

Hayfield added that he believed Ofgem and the Department for Business, Energy & Industrial Strategy (BEIS) should think about debt relief as a “positive thing”, especially in light of the amount of customers impacted by Covid who have never previously found themselves in difficulty.

He further highlighted the danger of newer market entrants with unsustainable business models, undermining other companies’ abilities to support the vulnerable.

He added: “The reality is the playing field has got to be levelled across all suppliers in markets, there needs to be consistency so vulnerable customers in particular can rely on support being available regardless of supplier.

“We know some suppliers are pricing below marginal cost to gain growth, which is making the pressure on all suppliers even more difficult for them to be able to provide additional support for the most vulnerable.

“It has to be government led, if government want to ensure markets and sectors don’t leave vulnerable customers behind they have to provide a mechanism for money to be available for them to take up the opportunity.”