Weekend press round-up: Energy groups told to submit support plans for PPM victims

Our latest review of sector coverage in national media includes further fallout from the scandal over forced prepayment meter installations by contractors employed by British Gas. Meanwhile, there is speculation about the next steps for energy bills support and potential bidders in the upcoming Capacity Market auction.

UK energy groups told to submit support plans for prepayment meter victims

Grant Shapps has called on UK energy bosses to spell out what remedial action they are taking to deal with customers who wrongly had prepayment meters forcibly installed in their homes, warning that the regulator risked having the wool pulled over its eyes by suppliers.

Energy regulator Ofgem last week ordered suppliers to suspend the practice of forcibly installing the meters, following a report in the Times newspaper.

An undercover investigation by the paper found that British Gas third-party contractor Arvato Financial Solutions was installing the meters in the homes of vulnerable customers.

Shapps, the business secretary, has called on energy suppliers to report to his department by Tuesday, outlining their plans to support affected customers through measures such as compensation.

Shapps has also urged Ofgem to establish a new reporting system to allow customers to record their experience of dealing with the energy companies and called on the regulator to strengthen its reviewing structures.

Ofgem had awarded British Gas the top ranking in two reviews carried out in the second half of last year, which assessed how suppliers were dealing with customers deemed vulnerable or who were struggling to pay their energy bills

“I am appalled that vulnerable customers struggling with their energy bills have had their homes invaded and prepayment meters installed when there is a clear duty on suppliers to provide them with support,” Shapps said. “They need to refocus their efforts on their consumers, the British public, who are at the receiving end of this abhorrent behaviour.

“I’m also concerned the regulator is too easily having the wool pulled over their eyes by taking at face value what energy companies are telling them. They need to also listen to customers to make sure this treatment of vulnerable consumers doesn’t happen again.”

Ofgem conceded that “the picture presented by companies may not accurately reflect what is experienced by customers on the ground”.

The Financial Times

British Gas cut off homes when it couldn’t connect prepay meters

Debt collectors working for British Gas have admitted to completely disconnecting heating or electricity on families when they have been unable to fit a prepayment meter, The Times can reveal.

A manager for Arvato Financial Solutions, a firm that collects debts for British Gas, told an undercover reporter that pay-as-you-go meters could not be installed at some homes so agents should cut people off entirely. “We were pushing them [British Gas] and saying grow a pair of balls and just f***ing disconnect these people because they will stop doing it. And now with British Gas, we’ll disconnect them,” he said.

While energy suppliers are technically allowed to disconnect residential customers, the practice is meant to be very rare, with customers instead forced on to prepayment meters. Most energy companies only routinely disconnect commercial properties because of debts.

The debt collection manager, who said he had previously been employed directly by British Gas, also described using underhand tactics to help staff pass tests meant to ensure they were checking for customer vulnerabilities.

The findings have been passed to Ofgem, the energy regulator, which yesterday announced legal action against British Gas in light of the Times investigation.

British Gas has been banned from breaking into homes and force-fitting prepayment meters until it can prove that it is complying with all its legal obligations. All other big energy companies have agreed to suspend the practice as well.

There are growing calls for a government review and legal change to ban the practice and protect vulnerable customers.

The Times

British Gas ignored watchdog’s warnings about force-fitting pre-pay meters five years ago

British Gas defied warnings from its regulator five years ago about forcing its way into the homes of struggling customers to install pre-pay meters.

The energy giant is under fire after it emerged last week it had sent debt collectors to break into the homes of vulnerable customers who had fallen behind on bills.

But The Mail on Sunday can reveal that Ofgem, the industry watchdog, issued a strongly worded directive in 2018 to British Gas and other suppliers instructing them to install meters by force only as an ‘absolute last resort’.

It said it had evidence that energy giants were ‘using such tactics too often’ and singled out British Gas as one of the worst offenders, forcibly installing meters twice as often as rival firms.

Ofgem director Rob Salter-Church said at the time he would take ‘tough action’ if British Gas failed to improve.

However, the company ignored Ofgem’s clear instructions. Its forced entries peaked in 2018 when more than 80,000 homes were affected.

Figures from the Ministry of Justice obtained by The Mail on Sunday show that the firm, which has nine million customers, is still conducting hundreds of thousands of forced installations.

Last year it installed 20,000 meters by force.

Two other firms, Ovo Energy and Utility Warehouse, were also criticised in the Ofgem report.

‘Some suppliers are very frequently using force to recover debt,’ Mr Salter-Church said.

‘Instead they need to identify struggling customers and support them in paying money back as our rules require.

Installing meters under warrant to recover debt must be an absolute last resort.’

Mail on Sunday

Courts waved through warrants to forcefit prepayment meters

Courts waved through applications by energy firms to forcibly install prepayment meters in people’s homes, according to internal advice from a top magistrate leaked to the BBC.

Previous guidelines required careful scrutiny of warrant applications, but new advice to courts deems those rules “disproportionate”.

Energy firms can apply for warrants when bills go unpaid for a long period.

But suppliers were told to stop force-fitting meters earlier this week.

The energy regulator Ofgem told energy companies not to forcibly install the meters following a report from The Times showing debt agents had broken into vulnerable people’s homes.

But in recent days warrants are still being issued. Privately industry voices are concerned that having ruled out disconnecting customers, and pausing prepayment meters, there is now a “charter for non-payers”.

The new advice for magistrates was posted within the last month on an internal website for magistrates, by the National Leadership Magistrate Duncan Webster.

In an internal FAQ post for magistrates, Mr Webster told magistrates the “advice given to justices has not kept up with changes in the way utility companies operate”. As the remedy sought by energy companies for unpaid bills is no longer disconnection, but installation of a prepayment meter, “checks magistrates have been asked to make are now disproportionate and go far beyond the legal requirements”.

In 2022, as the cost of living crisis took hold, magistrates approved more than 1,000 warrants a day. Almost all of these claims are now authorised electronically or over the phone, by specific magistrates courts allocated to each energy company.

Energy company agents apply by telephone and send in large spreadsheets with between 100 and 1000 cases, where customers are told they do have the right to contest the warrant, but many do not respond. The hearings will sign off, issue and send all the electronic warrants in “a maximum of 15 minutes” according to evidence from pilots.

Legal experts suggest that the advice showed that magistrates were no longer safeguarding vulnerable people and were instead accepting the word of big energy companies “in good faith”.

Calls are being made for the almost automated system of approval for warrants to be overhauled. Caroline Flint, chair of the government’s Committee on Fuel Poverty, said it was making the situation “worse for already fuel-poor households”.

The committee said no action by an energy company should make it harder for anyone to heat their home and that the system needed a complete overhaul.

The court system earns a per case fee from the arrangement, an important source of income after a decade when funding for the judicial system has been cut back substantially.

One magistrate, and former Justice of the Peace, stepped down last August after being left unable to check vulnerable people were being protected when a warrant for a prepayment meter was sought.

Robin Cantrill-Fenwick told BBC Newsnight changes to the court system meant magistrates “were doing nothing more than rubber stamping” warrants.

He said the lack of scrutiny is putting vulnerable households at risk.

BBC News

Scottish courts to review warrants for enforcing prepayment meters as calls for ban intensify

Scotland’s courts are to review the process for energy firms to obtain warrants to forcibly fit prepayment meters as calls for a UK-wide ban intensify.

At least 4,822 warrants to install the controversial meters were granted in Scotland in the ten months to October 2022, according to data obtained by i under freedom of information laws, while applications have been made in the country for 32,000 ‘warrants for entry’ across the same period. Campaigners fear the true number may be far greater, however.

Prepayment meters are controversial because they can automatically cut off energy supplies to vulnerable people, even in freezing conditions, if they fail to keep them topped up. i’s months-long investigation has led to calls for a ban on energy companies forcing their way into people’s homes to install the meters against their will.

The Scottish Courts and Tribunals Service (SCTS) has now said it will review the way warrants that have been issued – amid evidence from England and Wales that hundreds were ‘waved through’ at a time with little apparent scrutiny.

A spokesperson confirmed to BBC Scotland: “A working group has now been established to review the process for dealing with utility warrants, including the data recorded, with a view to improving the information currently available.”

First Minister Nicola Sturgeon says she supports campaigners’ efforts for an outright ban on the practice but does not have the ability to enforce a ban under Scotland’s devolved powers.

She said in response to a question from Bob Doris MSP: “Forcing people onto those meters, in particular for small amounts of debt during winter, makes matters worse for people – not better – and is more likely to increase debt and leave people unable to heat their homes.

“I urge the UK Government to respond to that concern and to listen to the many calls to ban energy companies from being able to force people on the use of prepayment meters.”

iNews

Energy Ombudsman complaints at a record high

Complaints made to the Energy Ombudsman by frustrated customers are at a record high, new data shows.

Figures shared with the BBC show 105,340 complaints were received by the Ombudsman in 2022, a jump of nearly 20,000 complaints since last year.

The data comes as energy suppliers are under scrutiny over their practices, as customers struggle with rising bills.

Energy UK, which represents suppliers, said the Ombudsman “plays an important role” in resolving complex cases.

Customers can appeal to the Energy Ombudsman to independently examine disputes between them and their supplier if the supplier has failed to satisfactorily resolve an issue.

Incorrect billing, poor customer service and problems with switching suppliers are the main causes of complaint, BBC Radio 4’s Money Box programme found.

Of the cases heard, 75% ended up being resolved in the customer’s favour.

BBC News

Energy prices to soar again as Jeremy Hunt rejects pleas to halt rise

Chancellor Jeremy Hunt has rejected calls to prevent sharp rises in domestic energy bills for all households in his March budget – meaning millions of users will see costs soar by about 40% from April.

Instead, Hunt will emphasise the extra support he is giving to the poorest and most vulnerable households, including those on benefits, in what he will describe as a more fairly targeted system of support.

Demands for the Treasury to halt a planned rise in the energy price guarantee (EPG) – the discounted cost of gas and electricity to consumers – from £2,500 to £3,000 a year for the average household in the March budget have been growing in recent weeks, particularly as the wholesale cost of energy has been falling.

Because an additional £400 of extra government help with energy costs for all households, made in monthly payments since October, also ends in March, the effective rise for all but those on the lowest incomes will be about 40%.

Calls for Hunt to stop the rise in the EPG have been led by consumer champion Martin Lewis, founder of the website MoneySavingExpert.com, who has said the move would be an obvious “rabbit out of the hat” that the chancellor could afford to pull out of his red box in March.

The Labour party has also been calling for the rise in the EPG to be stopped, and for the extra costs to the government of doing so to be met through the proceeds of a more punitive windfall tax on the vast profits of energy companies.

But Treasury insiders have told the Observer that the move is not under consideration, partly because Treasury receipts from its own windfall tax on energy companies have been less than expected, and because of worries about exposing taxpayers to future market risk.

Ruling out the move, a Treasury source said: “While gas prices have fallen in recent months, they are still five times higher than the historical average, and can just as easily increase.

“If the gas price spikes, the government will need to borrow billions of pounds more. While the energy price guarantee will continue to insulate millions of households from even higher wholesale gas prices, we need to reduce the taxpayer exposure to market volatility. Insulating every household – and on an open-ended basis – could have major implications for the public finances.”

The Observer

Billionaire investor Křetínský and trader Vitol eye fortune in British power plant subsidies

The billionaire West Ham United investor Daniel Křetínský and Swiss commodities giant Vitol are among bidders hoping to land hundreds of millions of pounds in subsidies to keep the lights on in Great Britain.

National Grid’s electricity system operator is preparing to announce successful bidders in a “capacity market” auction this month for 2026.

The annual auction will set a subsidy price to pay owners of power stations and battery storage facilities to cover the cost of being on standby in case of any rapid need for extra electricity. The costs are covered through consumer bills.

Existing plants are awarded one-year deals, with new-builds given 15-year contracts to guarantee covering investment costs.

Analysis of the public register before the auction shows that 69 new-build gas-fired plants have been proposed for 15-year contracts.

Gas accounted for 38% of generation last year – a three-year high as the single largest source of power. The prospect of more fossil-fuel-powered plants may anger green campaigners and those urging the government to move faster in supporting renewables projects.

The auction comes as the energy regulator Ofgem draws up proposals to prevent backup generators from raking in “excessive” profits as part of their licence conditions.

Energy industry profits are under intense scrutiny amid high consumer bills. Shell caused outrage after unveiling record profits last week, while BP is expected to post fourth-quarter underlying profits of about $5bn on Tuesday.

Křetínský, known as the Czech Sphinx for his aversion to publicity, has come to prominence in Britain after taking stakes in Royal Mail, West Ham United FC and the supermarket chain Sainsbury’s.

The tycoon’s UK energy assets include the Langage and South Humber Bank gas plants and Lynemouth biomass plant in Northumberland.

Křetínský’s EP UK Investments is bidding for 15-year contracts to guarantee supply from three new-build gas units at Eggborough. The North Yorkshire project’s backers argue there is an “urgent need” to replace electricity generation lost from retiring coal and nuclear plants at the site.

EP UK also hopes to land one-year contracts at Langage and South Humber Bank.

The Guardian

UK spent £60bn on gas to stave off winter energy crunch

The UK spent £60bn importing gas in just four months to stave off a winter energy crunch, according to analysis from storage experts Highview Power.

Its data reveals that in the absence of renewable energy storage to make the most of record wind generation, the country was forced to purchase expensive fossil fuels when the weather became more volatile over winter.

Britain experienced an unusual combination of wind conditions between this winter between October and January.

Low-carbon power produced 82.5 per cent of Britain’s electricity from 27 December to 9 January, however, the UK also experienced ‘dunkelflaute’ – a German term used widely in the energy sector to refer to cold, still days – when the country experienced little to no wind but still needed energy for heating.

This occurred in both November and mid-January and lack of renewable energy storage during these periods meant the UK was left with no choice but to rely on £60bn of foreign imports of gas to meet consumption needs.

The £60bn figure reflects a vast increase in imports, with data from the Office for National Statistics revealing the UK brought in less than £20bn of gas in 2021 as a whole.

Highview Power cited Ofgem estimates, which revealed that if the UK was able to boost storage to 1.35 TWh of wind during peak conditions, this would be enough to power 1.2m homes with clean, green energy every day.

Highview Power’s chief executive Rupert Pearce urged the government to ramp up storage capacity to reduce the UK’s need to turn to gas during periods.

“Renewable energy storage is essential to powering a cleaner, cheaper, always-on Britain. By capturing and storing excess renewable energy, which is now the UK’s cheapest, most secure and most abundant form of energy, we can power Britain’s homes and businesses with renewable green energy, taking millions of tonnes of carbon out of the atmosphere and ending a culture of reliance on expensive foreign imports,” he said.

City AM

Huge increase in electric vehicle usage needed for UK to meet net zero target

Four out of every five miles driven in 2035 will need to be by electric vehicles if the Government wants to hit its most ambitious decarbonisation targets, The Telegraph can reveal.

The UK would need to see a 21-fold increase in motorists using electric vehicles if the country is to meet net zero emissions by 2050, newly released figures from the Department for Transport show.

With only just over five per cent of miles currently driven in electric cars, if the Government was to push on with only the funded policies currently in place, this would only rise to 24 per cent by 2035 – the year when the sale of all petrol and hybrid cars will be banned.

The projections, which make up DfT’s Decarbonising Transport forecasts, show even if traffic grows at the lowest expected rate and the most ambitious green transport policies are implemented, 79 per cent of all car miles will need to be electric in 12 years.

A more conservative projection, which would see the country hit its net zero transport target after 2050, would still require 58 per cent of car miles to be electric by that date.

The Government’s ability to meet these targets has been met with scepticism by experts who point to supply chain issues, lack of chargers as well as cost, as major barriers.

The figures also reveal that taking steps to reduce car usage is not part of the department’s plan, with all of its projections anticipating an increase in car use.

This goes against the Climate Change Committee’s Sixth Carbon Budget, which says a reduction in vehicle miles is essential to hitting decarbonisation targets.

Even the projection that forecasted the lowest traffic demand still estimates a 24 per cent increase between 2022 and 2050.

With this increase in road use, four in five miles would need to be electric in 12 years time, and nearly 93 per cent by 2040.

Daily Telegraph

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.