Schemes for Protecting Vulnerable Communities against Energy Price Rises

03 February 2022 at 17:28:24

The Leader of Comhairle nan Eilean Siar, Cllr Roddie Mackay, has written to OFGEM suggesting two policy solutions to  protect vulnerable communities in the Western Isles and other areas against debilitating rises in energy prices.

Mr Mackay states:

"Many households, in particular the elderly, are liable to find themselves in a totally unacceptable 'eat or heat' situation. I am, therefore, keen to find out what steps OFGEM, the Government and the energy companies are taking to mitigate this unacceptable situation.

I believe that OFGEM and the Government require to move away from a blunt 'one size fits all' approach around the Energy Price Cap and develop a more sophisticated policy position. It should be possible, for example, to identify the areas within the UK that are in highest Fuel or Extreme Fuel Poverty brackets and provide these areas with appropriate derogations. For example, OFGEM and the Government could introduce some geographic variation, setting a lower Energy Price Cap for areas demonstrably suffering from Fuel Poverty and Extreme Fuel Poverty. Although I would expect knee-jerk pushback from energy suppliers around this type of approach it could be achieved readily and easily through the use of postcode zones, for example.

Another approach may be to remove the present distribution surcharge placed on all customers in the North of Scotland. This is an unfair and discriminatory charge that penalises customers in some of the most economically vulnerable parts of the UK. It is patently unfair that OFGEM and the Government appear to have a 'one size fits all' approach around an increase in the Energy Price Cap but are happy to allow a geographically differentiated electricity distribution cost. If a 'one size fits all' approach is appropriate for the Energy Price Cap, it should also be appropriate for distribution costs. I would, therefore, urge the removal of this unfair surcharge to more closely levelise distribution charges across the country.

The above represent two easy-to-implement policy solutions that will protect vulnerable communities against what will be a debilitating rise in energy price."

Cllr Mackay has asked for a meeting to discuss the proposals.