With the COVID-19 pandemic taking centre stage of late, here we consider how domestic suppliers are responding to the outbreak and how this could affect their day-to-day compliance.
Amid the ever-mounting pressure on suppliers due to COVID-19, licensees have been promised pragmatism by the regulator in its approach to compliance. In a statement on 19 March, Ofgem CEO, Jonathan Brearley said that the focus on compliance during COVID-19 is to ensure that companies protect consumers from immediate harm, particularly those who are vulnerable or at risk of going off supply. He explained that, where companies can demonstrate that any compliance issues have resulted from prioritising the protection of customers and security of supply, Ofgem will take full account of this in any decisions it takes. Indeed, Ofgem has asked suppliers to keep it informed of any challenges encountered along the way via covid19@ofgem.gov.uk
While BEIS has agreed measures with the industry to protect over 4mn prepayment meter (PPM) customers and those struggling to pay for their energy, suppliers are likely to be faced with conflicting priorities. Due to self-isolating employees, many suppliers will have a reduced workforce while facing increased demand for their customer services. Some suppliers have closed their contact centres altogether, while others have transferred their customer service teams to remote working. Across the board suppliers are asking customers who can manage their account online to do so, to enable them to focus limited resources on their most vulnerable customers. Last week, the regulator also urged customers not to call their supplier or network company unless they are in a vulnerable situation or it is a safety or emergency issue.
We have also seen suppliers suspend all meter read and engineer (e.g. boiler servicing) visits. For services that require home visits, under the Guaranteed Standards of Performance a supplier should not rearrange a customer appointment that is less than one day away without the customer’s permission. Undoubtedly, in prioritising the health and safety of customers and staff, suppliers will have done so. As with other Guaranteed Standards (GS), non-compliance requires a £30 compensation payment to the customer.
Having cancelled non-essential appointments, suppliers progress in the rollout of smart meters will be hindered. So far, the regulator has acknowledged that suppliers may choose to temporarily reduce their rollout activity, under the premise that any changes are kept under active review. Some have chosen to press ahead with smart prepayment bookings, for example, to prevent pay-as-you-go customers from losing their supply. Where these – and other emergency installations – do take place, suppliers and relevant third parties must follow Ofgem and official Public Health guidance. However, where social distancing measures limit the time an engineer spends in the home, the Smart Implementation Code of Practice requirement to deliver tailored energy efficiency advice during an installation may be compromised.
We might also expect communications between suppliers to dwindle amid these pressured and uncertain times. Without the adapted view on compliance, we would likely see a rise in domestic supplier payments for Guaranteed Standards (GS) for switching, for example. Another issue concerns customers who cannot submit their meter readings, which may lead to billing problems further down the line. This is of particular concern given any consequential rise in domestic energy spend during the lockdown. Suppliers may be faced with a rise in indebted energy customers, being required to assign resources to manage customer repayments and monitor affordability.
Some suppliers have confirmed their efforts to contact all PPM customers directly with advice to make sure their service continues. Proactivity to identify and support vulnerable customers is an approach that would sit well with Ofgem, we believe. The scale of this task will vary among suppliers however, and is likely to be a particularly large undertaking for those specialising in PPM and those who have limited information on specific customer vulnerabilities. Others have demonstrated good practice in signposting their customers to industry partners, to help those struggling financially to maximise their existing income and manage their money.
Suppliers are in no doubt aware of the problems facing them and some of their customers during this crisis. The greatest challenge is likely to be ensuring PPM customers have credit on their meter to make sure they don’t self-disconnect or self-ration over the coming weeks and months. However, while suppliers may want to do the right thing by their customers, there is a financial cost to their support, such as through payment holidays and increasing emergency credit.
Through our offerings in supplier compliance – including our Compliance Service and Energy Supplier Compliance Portal – we interpret the regulatory framework to understand specific, enforceable, obligations. We are able to give our opinion on specific compliance queries based on our understanding of the supply licences and other legislation, as well as other Ofgem and government sources, to help suppliers achieve good consumer outcomes and deliver best practice.
Please contact e.bill@cornwall-insight.com for more information.
