We have written to numerous MPs on the subject of tomorrow’s debate on energy prices, and to inform them of the increasing urgency of responding to the unregulated implementation of district heating systems nationally, in the hopes this will feature in the conversation. Below is the full letter:
Dear [name of MP],
We write in relation to the cross-party debate tomorrow secured by Caroline Flint, John Penrose, and Patricia Gibson, recognising that constant calls for switching are no solution for customers being exploited on default tariffs. We hope you will help push this motion to the vote.
The points on fuel prices below (1) are not a briefing: the facts and the tragic statistics on fuel poverty, including the 8,000 people who died from cold homes last winter, do not need to be rehearsed here. However, we thought you might find our comments useful as they reflect what we hear from angry and desperate energy customers every day.
They are followed (2) by some points on district heating, which we hope you may be able to raise in this context. These may be less well known, but as you know your constituents in Myatts Field and the Oval Quarter are facing fuel poverty as a result of district or communal heating systems which were badly planned, procured, and installed, and are being badly managed, without any regulatory control.
- The need for an absolute cap on prices of domestic fuel
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 (Guardian, 13 March). 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.
Denver McKay, the fuel poor energy customer in Glasgow quoted in Sunday’s Observer (12 March) presents the views of millions: “It’s privatisation that’s the problem,” Mckay said. “The government has given them billions, and their bosses are taking home million-pound salaries. It doesn’t matter if they’re rubbish. But what can you do?”
Energy is too important to be governed by the market. It should be controlled by the people who use it, owned municipally, cooperatively, or in many of the new organisations that have sprung up despite the government decimating support for the renewable sources on which many new schemes are based. We also need good insulation, efficient boilers, and communal heating systems that do not cost the earth. In the meantime, there should urgently be an absolute – not relative – cap on prices, at a level that does not leave thousands dying every winter in cold homes.
- Regulation of district heating
Heat networks in housing blocks or in districts, have huge potential to bring costs down and to save on carbon emissions, and tenants and residents in many places have benefited from them. But each of you is aware, from your own constituents, that for others the reality is very different from the promises. The industry is unregulated, and networks are commonly badly designed, badly procured, badly installed, and then badly operated and managed, with no redress and no escape for users who are locked into contracts for decades. Many users find that they are subject to frequent outages of both heat and hot water, cold hot water, and appalling customer service, in what are effectively unregulated monopolies.
There are well-run networks, often managed by local authorities or housing associations, whereas others, often run in the private sector, have seen corners cut at the design and installation phase, contributing to poor operation and high costs. Due to the way the schemes are financed, and the lack of regulation, many of them impose such high tariffs and standing charges that many customers are not using their heating at all, preferring to buy electric heaters, or go cold. Tragically, we know of one gentleman who died, apparently not having been eating due to worry about his heating bills, and having failed to get help.
We are aware that district heating is not the topic of debate on Thursday. But heat network customers would be only peripherally, if at all, protected by any cap on retail prices of fuel and must not be forgotten. The suppliers of heat are in many cases the same as the suppliers of gas and electricity – notably E.ON and SSE – but while they are regulated in one arena and can be heavily fined for breaches, they are unrestrained when they are supplying heat. We hope that you will raise this point on the basis of the representations that have been made to you by your constituents, and thereby help to put this issue on the Parliamentary agenda. At stake is not only the health – in fact the lives – of people in fuel poverty on heat networks now, but the future of district heating itself, which, for all its advantages, could be widely rejected if things carry on as they are at present.
The Scottish government is currently conducting a consultation on Heat and Energy Efficiency Strategies, and Regulation of District Heating. The concerns and proposals suggested even in the consultation document are well worth considering in Westminster.
Under increasing pressure from Tenants and Residents Associations, growing media interest, and the initiative some of you have taken in Parliament and parliamentary committees, there is now a new attempt by the industry itself to put forward proposals for change. As well as a focus on increasing “investor certainty”, a new industry task force initiated by the Association for Decentralised Energy
“will also consider how to build on the existing customer protection scheme, Heat Trust, including important consumer issues such as heat pricing, contract length and contract structure, areas which Heat Trust is not permitted by law to address.”
This is clearly the time for increased pressure. We hope you will use the opportunity of this debate, and would also be glad to be in touch with you about how to proceed with this issue in the future. We have recently submitted detailed proposals on the issue to the GLA, and would be happy to forward this to you.
Feel free to use this text as a template with which to engage your own MP! See also our press release on tomorrow’s debate for a quote.