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Latest 16 August 2022

Good Law Project puts Ofgem on notice of court action if it fails to comply with legal duties to protect vulnerable customers

The country is in the midst of an unprecedented cost-of-living crisis, with 35 million people under threat of fuel poverty in the coming months.

As the price of energy continues to rise relentlessly, households will be faced with energy bills they just can’t afford. And, with the Government’s package of support from May already rendered obsolete, there is very little help available for those who desperately need it.

Ofgem, the energy regulator, sets the level at which the cost of energy is capped. When it does this, it has a duty to protect consumers, particularly those who are vulnerable.

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In our analysis, that means it has to conduct a proper impact assessment before implementing changes to the price cap. Having done so, it has the power to ease the pressure of mounting bills on vulnerable consumers who are likely to be most affected by imposing a separate, lower cap for them, sometimes called a ‘social tariff’.

But, on 26 August, Ofgem is set to announce yet another energy price cap hike, which will come into effect on 1 October. This will raise the average household bill to a predicted £3,582, marking a 180 percent increase from this time last year. In doing so, it seems to have barely considered the impact its decision will have, let alone any steps it could take to mitigate it.

In July, we wrote to Ofgem, expressing our concerns about its decision-making. We asked it to provide proof of its impact assessments. We got a three-line reply, which did nothing to ease our concerns.

That is why we, along with Fuel Poverty Action and Dion Alexander, the Chair of the Highlands & Islands Housing Associations Affordable Warmth Group, have written to Ofgem demanding it does more to protect vulnerable people and off-grid communities.

We are now calling on Ofgem to commit to carrying out proper impact assessments, and to consider appropriate mitigation measures, before raising the energy price cap any further.

Ofgem can do much more to protect vulnerable people. 

You can read our new letter to Ofgem here.

Dion Alexander (Chair of the Highlands & Islands Housing Associations Affordable Warmth Group): “This is an urgent wake-up call for Ofgem who are clearly failing in their self-proclaimed “duty to ensure fair treatment for all consumers, especially the vulnerable”. Why is Ofgem discriminating so unfairly between off-gas and dual-fuel households? Gas costs 7p a unit and electricity 28p a unit, but 15 percent of all UK consumers can’t get mains gas and can’t escape having to pay so much more than even their hard-pressed dual-fuel counterparts for exactly the same level of energy consumption. It’s manifestly unfair and it’s the vulnerable who bear the brunt. That’s why they at least need the protection of a manageable ‘social tariff’, set at the same price per unit for both gas and electricity.”

Fuel Poverty Action: “Ofgem are failing in their duty to protect those most vulnerable in our societies from the horrors of living in fuel poverty. The price cap is one aspect of a failing energy system that is no longer fit for purpose and its meteoric rise is pushing millions into fuel poverty. Ofgem must stop acting in the interest of the energy suppliers and the fossil fuel industry, and begin to understand the life threatening conditions they are imposing on people this winter.”

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