On 17 June 2014 the APPG held a joint meeting with the Fuel Poverty and Energy Efficiency APPG to discuss how well the energy market works for vulnerable consumers. 

Marilyn Price of Stratford-upon-Avon CAB spoke first. She explained PPM users pay higher energy prices and often endure the loss of energy supply. Many feel the information suppliers provide on fuel costs was poor, making it difficult to manage money well.

PPM households usually do not get given a PPM to pay off debts, rather they inherit their meter when they moved in and are ‘stuck with it’. Spiralling debt and fuel poverty are the hallmark of CAB clients using PPMs.

Mike O’Connor from StepChange Debt Charity highlighted some broader concerns over fuel debt.  Clients with arrears now owe their energy supplier around £1,000 on average – a figure up a third in four years.

Mr O’Connor said it was primarily the Government’s responsibility to make sure energy bills were affordable. Teresa Perchard from the Fuel Poverty Advisory Group agreed and said the need for a new Fuel Poverty Strategy was urgent.

Mr O’Connor expressed concern that people in financial difficulties were often turning to high cost credit as a coping mechanism to deal with rising energy bills. This only made matters worse.

He said StepChange wants energy companies to give customers a clear incentive to deal with their debts. Some kind of “breathing space” scheme would guarantee protection from unaffordable payments. Energy companies needed to do a lot more work in this area.

Philip Cullum of Ofgem expressed concern at how difficult it was to switch from a PPM. He said the energy regulator would look again at addressing the barriers.

Mr Cullum said Ofgem has a real dilemma about how the costs incurred by suppliers should be spread across customers using different payment methods. Energy UK agreed. Mr Cullum said Ofgem wanted to raise the profile of this debate in the next few months.

Mr Cullum said Ofgem is working with the advice sector and suppliers to develop a consumer energy debt advice guide. He noted Ofgem’s recent announcement on switching and its review of how debt-related objections could delay the process. Ofgem wants to make sure it’s not just the affluent and internet-savvy who get the best deals.

Kevlin Hopkins MP from the Fuel Poverty APPG observed that the poorest homes are often the coldest. He lamented the inadequate energy efficiency of British housing stock and argued the state had a bigger role to play. It is particularly important to provide free insulation for elderly people who lack the means to improve old social housing stock.

Responding for Energy UK, Dan Alchin admitted energy companies suffered from a lack of public trust, which meant customers often failed to reap the benefits of Government energy efficiency schemes. He suggested third party partnerships could be the way forward.

Asked whether energy companies would commit to more proactive engagement with PPM users, Mr Alchin said Energy UK wants to look at work by Citizens Advice on self-disconnection (forthcoming) so that companies were able to “look at the issue in the round”.