Ovo joins requires overhaul of family vitality standing fees
E
nergy agency Ovo has joined requires vitality standing fees to be abolished for weak prospects because it confirmed it is not going to be passing on the newest enhance from October 1.
Ovo chief government Raman Bhatia warned that households have been going through a chronic interval of excessive costs compounded by wider cost-of-living pressures that would go away thousands and thousands struggling except pressing motion was taken.
The agency is looking for a social tariff to be in place by subsequent winter, focused at these prospects who’re essentially the most financially weak, and for the standing cost to be scrapped this winter for customers who want assist within the meantime.
The standing cost is a set quantity of round £303 a 12 months that individuals pay on their vitality invoice which doesn’t change based mostly on utilization.
Ofgem’s current announcement that it was reducing the vitality value cap by round £150 from October 1 additionally included the element that it was permitting standing fees to rise from 82p a day to 83p.
Ovo mentioned it might not be passing on the rise to prospects.
The standing cost, which has risen from 74p a 12 months in the past, is used to pay for a lot of issues, together with the maintenance of the electrical energy and fuel grids.
However, its critics say it’s an unfair system which provides folks much less management over their vitality payments.
It might imply a family which solely makes use of fuel for heating their house, and never for warm water or cooking, will nonetheless be charged throughout the summer time months when their heating is off.
Although such houses are uncommon, it might depart folks with fees they don’t perceive and might do nothing about.
Earlier this 12 months, the boss of British Gas proprietor Centrica mentioned that the system penalises those that attempt to preserve their vitality payments underneath management by lowering how a lot fuel and electrical energy they use.
Centrica chief government Chris O’Shea mentioned the cost hit these have been cautious about their vitality use hardest, and people on prepayment meters might unknowingly construct up money owed over the hotter summer time months.
Octopus Energy chief government Greg Jackson has additionally criticised the cost, arguing the fee needs to be moved on to unit charges with additional assist for low revenue or disabled prospects, giving folks extra management over their payments.
Mr Bhatia mentioned: “Energy bills are set to stay high despite the recent price cap reduction. This leaves many households with stretched finances struggling to pay. We are calling for a reform of the unpopular standing charge and a social tariff for the most financially vulnerable.
“Our own customer support package will provide immediate support to our customers who need it most right now. By working with partners like StepChange we can continue to directly help people facing hardship this winter and beyond.”
StepChange chief government Vikki Brownridge mentioned: “This winter will continue to be challenging for households across the UK.
“Government must look at all options to deliver more to support consumers – particularly those on prepayment meters – ahead of another bleak winter. StepChange has long called for the implementation of a social tariff, which will help to shield the most vulnerable in our society from continued high energy costs.”