A joint report from NEA and Waterwise

Following on from the June 2020 NEA policy paper “The Gathering Storm: Utility Debt and Covid-19”, this paper provides an evidence synthesis of personal debt, both prior and post the Covid-19 outbreak, with a focus on the shift from consumer debt, such as loans and credit cards, to household debts, such as arrears with utility providers, offering a comparison of known debt levels in energy, water and local government.

NEA’s Response to the BEIS Consultation on a Green Gas Levy. NEA disagrees with the introduction of a new levy on gas bills to pay for green gas projects, and believes that this should be paid for out of general taxation. If the proposals were to be taken ahead for a new levy, NEA believes that this should be constructed in distributionally fair way instead of the proposed flat rate for all users.

NEA recognises that many low-income households experience affordability issues with their essential household bills, rarely struggling with one bill in isolation, and as a result is delivering a programme of work which seeks to support ‘People Living in Water Poverty and Fuel Poverty’.

NEA has extensively engaged with Ofgem the DNOs to help shape this price control, through stakeholder meetings, workshops, and through working with Ofgem in the RIIO 2 working groups. NEA is so far pleased with Ofgem’s approach in the ED2 price control, especially the increased focus on stakeholder engagement and vulnerability. We believe, however, that there are several areas that require closer, additional consideration.

While we understand that, at present, the key focus for the Department is to ensure that the Single Electricity Market (SEM) is maintained and fully operational after the implementation period. We also note that issues such as retail, consumer vulnerability and fuel poverty issues are an integral part of the Electricity Directive and Clean Energy Package as a whole and the translation of these issues have been paused and are to be considered under the new energy strategy.

On the 21st July, the Chancellor launched the 2020 Comprehensive Spending Review (CSR). The Review, which will be published in the autumn, will be critical to help accelerate efforts to end cold homes during this parliament. Within this submission, NEA outlines its key priorities and vital opportunities to create warmer and healthier homes, help stimulate the economy, reduce poor air quality and reduce carbon emissions.

In 2012, NEA developed a scoping study with Ofgem to explore how well-placed network companies are to deliver social action cost-effectively and support the alleviation of fuel poverty. Throughout ED1 and GD1, NEA has worked with Ofgem and the network companies to embed many of the recommendations and cultivate several projects which support low income and vulnerable households.

NEA continues to support the agenda to eliminate the UK’s contribution to climate change by 2050 and appreciates that carbon pricing is a significant policy lever to meet this target. However, as the Government is considering the future of carbon pricing as the UK leaves the European we believe that there is an opportunity to ensure that future carbon pricing leads to fairer outcomes for domestic energy consumers and critically supports other cost effective and sustainable way to address these issues.