posted on 2018-01-25, 12:49authored byCosmo Graham
The regulation of the energy supply industry and particularly the approach taken to consumers in
vulnerable circumstances is undergoing significant regulatory changes. The starting point came with
Ofgem’s publication of its consumer vulnerability strategy in 2013, the first regulator to produce
such a document. Further impetus has come from Ofgem’s long-standing desire to rely more on
principles based regulation and the remedies package of the Competition and Markets Authority
(CMA) following its market investigation into the energy markets, particularly in relation to prepayment
meters (PPMs). This article looks at one aspect of the proposed changes: namely Ofgem’s
recent proposal to add a broad enforceable vulnerability principle into the standard licence
conditions of energy suppliers. Before discussing the proposals, it is worth providing some
background and context to them. THE REALITY OF VULNERABILITY
There has been substantial debate over the definition and subsequent measurement of fuel or
energy poverty with the latest statistics showing that there are 2.38 million households in England in
fuel poverty. However, focusing on this obscures the issue that there are large number of people in
other circumstances which may also place them significant risk of vulnerability. There are, for
example, some 11 million people in Britain with a disability, 6.5 million people in the UK who
function as carers, around a million adults have a literacy level of a 5-7-year-old (there is an
equivalent, probably worse numeracy problem) and just under 5 million people in the UK over the
age of 75. This is without considering that vulnerability may also be transitory, and/or triggered by
life events such as divorce, bereavement, illness or loss of employment. Vulnerable consumers do
not constitute a separate or static part of the population. There are a range of multi-dimensional
factors which contribute to the risk of consumer vulnerability and understanding these factors is
essential to identify and address the issues facing such people in the energy sector.
History
Citation
Utilities Law Review, 2017, 21 (4), pp. 154-158
Author affiliation
/Organisation/COLLEGE OF SOCIAL SCIENCES, ARTS AND HUMANITIES/School of Law
The file associated with this record is under embargo until 24 months after publication, in accordance with the publisher's self-archiving policy. The full text may be available through the publisher links provided above.