CMA call for heat networks regulation – but leaseholders’ crisis is ignored

Fuel Poverty Action are glad to see the CMA’s recommendation for regulation of heat networks – which is long overdue –  and the acknowledgment that while some customers benefit from District Heating, others are trapped with high prices and regular outages.  With the government poised to release £320 million of public money for heat networks this autumn, consumer protection is urgent. As well as regulation, this protection must be built into low carbon planning requirements. And it must include protection from the common problem of overheating, summer and winter.
However, one outstanding issue does not seem to have been addressed, despite FPA specifically raising this with the CMA when they consulted us, and in our response to their Statement of Scope (a response they do refer to in relation to reliability):  The huge demands on leaseholders for capital when a heating system is deemed to require further expenditure — often extending beyond repair to major extension or improvements.
Ruth London from Fuel Poverty Action said,
“Demands for tens of thousands of pounds each, on top of high standing charges for maintenance, go beyond what leaseholders can be expected to budget for and are not reasonable: freeholders and heat suppliers are in effect asking these individual householders to finance an infrastructure development in UK heating.
“This is similar to the demands being made on residents of tower blocks clad in the same combustible materials as Grenfell Tower, who are also being asked for five figure sums to remove and replace their own cladding.  Here too, the materials chosen by developers were not chosen by residents, and they should not be asked to pay the cost for others mistakes or cost-cutting decisions.  Many simply do not have the money to do so.”
The very weak legal position of leaseholders in the UK has recently been the subject of much debate in the media and in Parliament including a recent debate led by Leasehold Knowledge, with input from residents of many residents associations.
FPA have worked with leasehold residents in several estates who are fighting such demands in court, who would be ready to speak to the media.
One says,
“On my estate over 80% of leaseholders have moved out or now rent their flats and live elsewhere outside of London to pay the debt.”
Another says,
“Many of the leaseholders are pensioners and they are simply too old to move and organise renting out their dilapidated flats, the money will simply come from their food.”

PRESS RELEASE: Ofgem confronted over narrow “safeguard” cap at Millbank HQ

November 21st 2017

This morning, on the eve of the release of the latest excess winter deaths statistics, we delivered a tiny cap to Ofgem, along with a letter about their proposed “safeguard” cap on energy tariffs, which will exclude many of the people who need it most, leaving them open to continued uncontrolled “rip-offs” by energy suppliers.

The letter was initiated by Fuel Poverty Action and Disabled People Against Cuts, and has been signed signed by two national trade unions, PCS and UNISON, and a wide range of over 30 disability, women’s, anti-poverty, energy focused, and community organisations.

Representatives from Fuel Poverty Action, Disabled People Against Cuts, the All African Womens Group and Haringey Pensioners Action Group gathered outside 9 Millbank to tell Ofgem that if their plans go ahead unchanged, many disabled people and parents of small children, who could qualify for the cap, won’t. They will be left out in the cold because they do not receive the Warm Home Discount, which is awarded on a first come first served basis.

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PRESS RELEASE: Failing London District Heating Scheme in constituency of Minister responsible for promoting district heating

PRESS RELEASE
District Heating, or “heat networks”, are supposed to be the answer to fuel poverty and reducing carbon emissions. However, while the UK government, and, in London, the GLA, have been strongly promoting District Heating, they have little evidence to show that it is meeting consumers’ needs, or helping the environment.
While some residents groups have fought to keep heat networks that have kept them warm at low cost for years, others are paying a heavy price and are insisting on an overhaul of how this technology is provided.
In April 2017, Fuel Poverty Action published a detailed report of the District Heating scheme in Myatts Field North, south London.  “Not Fit for Purpose”[i] laid out the huge problems faced by residents on this mixed tenure, private and council estate, and their struggle to hold the supplier, E.ON, and LB Lambeth to account.  This led to a BBC Radio 5 Live investigation broadcast 30 April. [ii]
Since that programme and report, residents from other schemes have been in contact with FPA highlighting similar difficulties.
A first meeting of District Heating residents from different estates took place in London on 20 May.
Two residents attended from the Pembroke Park estate in Hillingdon, West London, where 105 households – a mix of social tenants and shared owners with A2Dominion Housing Association – have lived through seven years of serious problems without either compensation or redress:

  • For the first nine months in 2011 no bills were sent to residents, leaving them with huge back bills of over £500 in some cases. These are still haunting customers, who are now being asked to pay them off through prepayment meters which take up to 35% of the money put in.  No one can tell if the arrears being demanded are correct.
  • Residents were told that if they did not accept smart prepayment meters they would be cut off.
  • For the first five years there were constant outages of heat and hot water, even while residents were paying an average of £80 a month.  New communal gas boilers have improved this but there are still outages, most recently in March 2017, as well as continuing serious problems with water temperature and heat.
  • Residents were promised bills of around £22 a month but some are paying £50 a week on the pre-payment meter.  Some leaseholders and shared owners are being charged an extra £50 a month for “service and maintenance”.
  • Thermal imaging shows that due to lack of insulation, Pembroke Park residents are “heating the street”, in the words of John Turner, A2Dominion  director, who has done nothing about it.  One household with a very sick child did eventually get insulation; nothing was done for the many other vulnerable residents.
  • Customer service has been very poor.

There has been hardly any progress to date, despite residents highlighting issues with their local MP, Nick Hurd — the Minister for Climate Change and Industry, in charge of promoting District Heating across the country.[iii]  Another meeting is now being set up with Nick Hurd, if he is re-elected, and residents plan to increase the pressure on their social landlord A2Dominion and the developers Taylor Wimpey.
Tracey Rogers, from Pembroke Park, says,
“They promised us in 2011 they would clear the bill but they never did; they were even billing people for usage before they had moved in. I am now putting £50 a week on the pre-payment meter and getting £32.50 of energy. They are back-billing us for a bill that is over 6 years old, that we never agreed to, they never asked us, they have not taken our incomes into consideration, they have never considered the vulnerable, the low or no income households and they have refused to credit or compensate us for the poor service over all these years.”
Ruth London of Fuel Poverty Action says,
“FPA supports the principle of District Heating, which should be able to bring down both bills and carbon emissions.  However, we are getting a flood of complaints from residents, who are paying horrendous prices for an appalling service. In the winter, many are going cold.  With District Heating unregulated, complaints very often lead nowhere.  Even metering and billing, the only two aspects of District Heating which are supposed to be regulated, still, tend to be exploitative, with smart meters failing to function, absurdly high estimates, and chaotic billing / back billing, taking advantage of users’ inability to switch.
Residents are left to navigate through a complex web of organisations which can range from the heat network operator, the housing association or housing developer, and the council, to the Heat Trust and the energy ombudsman – all of which wash their hands of any responsibility.  Meanwhile they are tied against their will to contracts that can last for generations, and are financing a major UK infrastructure change.” 
We are now hearing from dissatisfied residents on a regular basis and will be highlighting further such schemes over the coming weeks.   Even Ofgem and ADE – the trade body of the Heat industry –  are actively discussing the need for regulation.[iv]  Yet the Task Force created by ADE has no representative of District Heating users on it.

Residents of Pembroke Park are available for interview.
###
 
NOTES
[i] For the full report and the executive summary see here: https://www.fuelpovertyaction.org.uk/research/
[ii] https://www.fuelpovertyaction.org.uk/wp-content/uploads/2017/04/5LiveInvestigates-20170430.mp3
[iii] Nick Hurd https://www.gov.uk/government/people/nick-hurd has been the Minster for Climate Change and Industry, and together with the Minister for Industry and Energy this brief includes “energy efficiency and heat, including fuel poverty”.
[iv] Ofgem see eg: https://www.ofgem.gov.uk/system/files/docs/2017/04/heat_networks_consultation_response_website_0.pdf
ADE (Association for Decentralised Energy) see https://www.theade.co.uk/news/press-releases/industry-launches-new-district-heating-task-force-welcomed-by-government

PRESS RELEASE: Parliamentary debate – Switching is no solution to exploitative energy prices

Tomorrow Thursday 16 March Parliament will debate a cross-party motion which states that the House

deplores the big six energy firms’ treatment of out-of-contract energy customers on default tariffs; believes immediate action is needed to protect these consumers, and that pushing customers to start switching will not fix the problem sufficiently quickly or completely on its own; and calls on the industry, regulators and the Government to consider solutions which recognise that many people lead busy lives where switching their energy supplier may not always be a high priority.”
Fuel Poverty Action has written to selected MPs, urging them to press the motion to a vote.  The letter says, 
This debate is a chance for Parliament to finally acknowledge that mass switching is not the solution to extortionate energy prices.  Experts are frustrated and baffled that customers don’t “engage” with the market.  But millions of us see the whole thing as a distraction and a con.  Many refuse to spend precious hours, on a procedure that for most of us is not simple, only to see the price comparison change a few months later.  And if loads of us switched, the market would simply “adjust” with higher prices for all.
We can also expect to see it adjust if the government goes for a “relative price cap” limiting the worst tariffs to a percentage higher than the best, as advocated by Conservative ex-minister John Penrose, one of the three MPs sponsoring this cross-party debate . The lowest tariffs would go up, and would bring the cap up with them – more of the cat and mouse game with consumers we’ve been seeing for years.
We cannot accept the arguments offered against a cap that could save lives.  We are told that a cap would have a chilling effect on competition – as if protecting competition were a higher priority than protecting lives.  A cap would be a minimum, not a maximum.  There is nothing to stop any supplier from offering tariffs well below the cap, and advertising that they have done so.  We are also told that an absolute cap, as opposed to a relative one, would make the market slower to respond to change.  But so far, it has responded quickly to any hint of rising wholesale prices, and with the speed of a tortoise when wholesale prices go down.  And there cannot be any credibility in charges of “interference” with the market when the market has exploited so many for so long.
Ruth London from Fuel Poverty Action comments:
“It’s about time the government admitted that most customers have our work cut out just surviving and do not have time to spend endlessly switching back and forth between exploitative energy giants.
“Energy is too important to be governed by the market, it should be controlled by the people who use it and the workers who provide it.  In the meantime, there should urgently be a cap on prices, at a level that does not leave thousands dying in cold homes every winter.  We also need good insulation, efficient boilers, renewable power, and communal heating systems that do not cost the earth.  Instead, energy efficiency measures, and support for renewables have been savagely cut – as have the wages and welfare benefits that many fuel poor people depend on if they are not to freeze.”
District Heating:
We are also asking MPs to raise the plight of customers of malfunctioning district heating systems who are trapped in long contracts and would be outside any cap as the heat industry remains unregulated.  Heat network customers are available for interview.

PRESS RELEASE: Fuel poverty campaigners ridicule little CMA cap on prepayment meter tariffs

11th November 2016

A dozen campaigners today delivered a response to the Competition and Market Authority’s proposals to cap the extra cost paid for energy by users of prepayment meters. They came from Fuel Poverty Action, National Right to Fuel Campaign, Unison, and the All African Women’s Group, and included pensioners, teachers, and asylum seekers. They wielded placards proclaiming “Your cap doesn’t fit”, “Higher Tariffs = Discrimination” and “Cold Homes Kill”.i

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Prepayment meter users pay on average £300 more than customers on direct debit. The CMA propose to decrease this difference by just £75. In their response, Fuel Poverty Action demanded parity, a position which has been endorsed by a series of other organisations.ii FPA handed in the response in the lobby of Victoria House, in a tiny doll’s cap, to highlight the insult of the CMA’s insufficient proposal.

Passing on the cap containing a scroll with the response, Ruth London of FPA told Project Director Erika Lewis, “Energy companies’ license conditions forbid discrimination against users of PPMs, the CMA’s own Roger Witcombe has declared, It is unacceptable that 4 million households on prepayment meters, many of them vulnerable, face higher bills than other energy customers,’ and yet the CMA’s proposals will perpetuate this injustice.” Erika Lewis, for the CMA, agreed that the proposals are not set in stone and promised that they would take seriously the evidence provided.

Given the rife exploitation of customers by the energy industry, Business, Energy and Industrial Strategy secretary Greg Clark has promised to “deal with this problem”. Fuel Poverty Action are therefore today sending a letter to both Greg Clark and Theresa May to ask whether they genuinely intend to challenge an industry that has had a free pass for so long, or will they bring in measures like the CMA’s cap, that sound good on paper, but in practice leave us in the cold.

Case Study

As well as costing more, PPMs are often forced on people, sometimes by break-ins to their homes. One such case is that of Josh Hull of Windsor who came home to find his front door lock broken – hea thought he had been burgled. He then found his payments debited for a previous tenant’s debt – a common problem – and is unable to use his electricity. Aside from the cost, he says the anxiety and sleepless nights are draining, and have harmed his performance in a new job. He is ready to speak to the media.

[i] Pictures available here: https://drive.google.com/drive/folders/0B0qHcBpAhFaCVUQtcWwxS0RiYkk?usp=sharing

[ii] See our response on our website for the full list of endorsements: https://www.fuelpovertyaction.org.uk/campaigns/no-minor-cap-on-prepayment-meters-parity-now/

Email: [email protected]

Website: fuelpovertyaction.org.uk

Phone: 07751 748 026

Twitter: @fuelpovaction

PRESS RELEASE: Campaigners against fuel poverty take action in Brixton Library

At 11am on Saturday local activists gathered at Brixton Reference Library to protest fuel poverty with a “Warm-Up”. After handing out leaflets and chanting slogans like “Warm homes are a right, Here to stay, Here to fight” in Windrush Square, they moved into the library and occupied the foyer for an hour. They sought to highlight that Lambeths’ libraries are a lifeline for many people, providing warmth, community, and access to vital services, and yet they’re threatened with closure. This will only exacerbate deaths from fuel poverty, which hit 43000 in the winter of 14/15, whilst the Big Six rip off the public by £1.7 billion a year. The action was called and organised by Fuel Poverty Action (FPA), Lambeth Pensioners Action Group (LAMPAG), Lambeth Older Peoples Alliance (LOPA) and Myatts Field South Tenants and Residents Association (MFS TRA).
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Fuel Poverty Action February News

Fuel Poverty Action pay a visit to Ofgem
Fuel Poverty Action pay a visit to Ofgem

Winter is always a busy time of year for Fuel Poverty Action. This February has been particularly hectic. Here’s a brief look at some of the things we’ve been up to and how you can get involved.
In the same week that it was announced that 3,000 people could die that week from cold homes, so-called energy regulator Ofgem suggested that people take packed lunches into work so as to save money to pay their rip-off energy bills. In a couple of hours we organised a pack-lunch protest to express our outrage that Ofgem is more interested in regulating our lunches than the Big Six energy companies. See coverage of our action on Russia Today and by Global Justice Now.
There was also action on fuel poverty in Kirklees that week with a ‘warm up theatre stunt’ in Huddersfield where they also handed out copies of our Energy Bill of Rights.
This month we’ve got two new blog posts on our website looking at some of the support and solidarity work that we do with people directly affected by fuel poverty. One is from an English for Speakers of Other Languages teacher at Tower Hamlets college describing how she is covering fuel poverty in her classes. Our second blog post is a victory we have helped secure on behalf of a pensioner couple being harrassed for years by Britsh Gas. This victory shows that we can have concrete and significant wins when we help each other out. If you’d like to get involved in supporting each other in taking on the Big Six energy companies and dodgy landlords who leave us to freeze, get in touch and visit our resources page here.
Thanks to the latest groups to sign up to our Energy Bill of Rights, including our first union – BECTURead our Energy Bill of Rights here and take a look at the impressive and diverse list of groups who support it.
Upcoming actions
This week is the Radical Housing Network week of action culminating with a mass action to Block the Budget on Monday 23rd February. There have been loads of actions happening across London organised by local housing action groups – it’s difficult to keep a track of, but the RHN are attempting to here. We’re organising a ‘warm homes bloc’ on the main action on Monday. Join us there to demand warm, healthy, secure homes for all!
Wednesday 25th February is a day of Britain wide solidarity with Tony Cox, an unemployed activist arrested by the police for supporting a fellow claimant at the Job Centre. We’re supporting the statement written by our friends Edinburgh Coalition Against Poverty and the Scottish Unemployed Workers Network. When dealing with the Job Centres, housing offices and the Big Six energy companies they want us isolated, alone and scared – they know that when we help each other, we can win!
Have we missed anything?! Let us know what action against fuel poverty you’re planning!