Calls for new social energy tariff to help cut costs for people with a disability or low income

More than 2,600 people have signed an online petition urging the UK Government to introduce a new social energy tariff for “disabled and financially vulnerable people who are rationing energy”. Petition creator Dan White argues that “an energy social tariff based on household income and household energy consumption could lift millions out of fuel poverty”.

The new, lower energy price cap started on April 1, which should benefit most households, however, the standing charge for electricity have gone up from 53 pence per day to 60 pence (24.50 pence per kWh), while the standing charge on gas has risen from 29 pence per day to 31 pence (6.04 pence per kWh).

The disability campaigner warns that the standing charges will directly affect people with medical equipment or health conditions as “some are not charging essential equipment they need daily as they cannot afford their heating”. As a result, Dan warns that “further failure to take action on energy could leave more disabled people and others in fuel distress”.

The ‘Implement a social energy tariff for disabled and financially vulnerable people’ has been posted on the petitions-parliament website here. At 10,000 signatures it would be entitled to a written response from the UK Government.

It states: “Prevent more people falling into fuel poverty by implementing a social energy tariff. An energy social tariff based on household income and household energy consumption could lift millions out of fuel poverty, including disabled and vulnerable people who are rationing energy.

“A consultation on support for energy bills was promised over a year ago. Failing to implement this policy could cost lives this winter.

“Further failure to take action on energy could leave more disabled people and others in fuel distress. For instance, disabled people can have higher energy use for mobility and health needs, and some are not charging essential equipment they need daily as they cannot afford their heating.

“We believe current cost of living payments are woefully inadequate, and a social tariff is needed urgently.”

The latest Ofgem energy price cap will be in place until June 30, 2024, you can find standing charges and unit rates per region on the Ofgem website here.

Ofgem to consider ‘time-of-use’ price cap for households

Ofgem announced last month that it is to consider a new “dynamic” price cap based on the time of day households use their energy. The regulator has launched a consultation on a range of options for the future of the price cap, including a “more dynamic cap” with “time-of-use dependent unit rates to encourage consumer flexibility”.

Ofgem said the increasingly renewables-dominated electricity sector would reward consumers for shifting the time of their energy consumption, which would in turn reduce costs for everyone. As more households adopted time-of-use tariffs, it could become harder to retain a universal price cap that was suitable for everyone.

The introduction of half-hourly settlement from 2025 - when smart meters will record energy consumed every 30 minutes - is expected to lead to a growth in smarter time-of-use tariffs that reward customers for being more flexible in their energy usage, Ofgem said.

This would allow consumers to benefit from cheaper energy when renewable generation increases, such as when it is particularly windy or sunny.

Other options include a targeted cap which could be based on a variety of factors such as vulnerability, and more flexible, market-based price protections such as setting a limit between a supplier’s default tariff and tariffs available in the market, capping the margin suppliers are able to make, or replacing the cap with a ban on acquisition-only tariffs.

Tim Jarvis, Ofgem’s director general of retail and markets, said: “While the price cap played an important role in protecting consumers from the loyalty penalty that existed before its introduction, the energy market is changing as we move to net zero and we recognise the systems we have in place may need to change too.

“We’re looking in detail at the elements of the price cap that have worked well and the challenges we’ve identified in recent years, while also considering how a wide range of future consumers will use and pay for energy to make sure we develop the right measures that will protect and benefit consumers across the board.

“We will continue to work with government, industry, consumer groups, charities and the public on the future of pricing regulation. Our aim is ensure the market works for everyone.”

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