Highland housing chiefs raise ‘unfair’ fuel prices with UK Energy minister: SSE is next

fuel povertyHighlands housing campaigners have met with UK Energy Minister Ed Davey to urge him to look at ‘unfair charges’ imposed by utility companies which are contributing to residents having the highest levels of fuel poverty in the UK.

A delegation representing housing associations in the Highlands and Islands  highlighted how local people are struggling with higher electricity prices than the rest of the UK, harsh climatic conditions and ‘exorbitant’ heating oil prices in remote rural areas – which are off the mains gas supply.

Households living in North West Scotland typically pay £1,000 more a year on energy bills than in the Central Belt leading some to self-disconnect due to high costs. A recent survey found that 71% of Western Isles residents are living in fuel poverty compared to the 27% Scottish average.

Housing associations are calling on the government to end regional price levies which are leading to some residents only heating one room of their homes. Despite being one of the coldest places to live in the UK, standard electricity prices cost 2p more a unit than most of the country and heating oil is delivered by just two or three suppliers with the cost varying by up to 10p a litre.

In addition, the campaigners wish to see the “Economy” tariffs on offer from the electricity companies reviewed to remove price differentials which severely disadvantage off-gas customers.

Speaking for the Highland and Islands Housing Associations, Mr Di Alexander, Chairman of Lochaber Housing Association, said: “We received a very fair and sympathetic hearing from the Minister and the facts of our case were not found wanting.

 “However, it seems that the Government’s room for manoeuvre on existing pricing difficulties is limited by legal and financial constraints previously given to the energy suppliers and the regulator, Ofgem.

Our next ports of call will therefore be Ofgem and SSE’ (the Perth-based utility giant).

“We will also press all political parties in the run up to the May 2015 general election to give a clear promise to bring the existing unfair and discriminatory energy pricing regime applying in the North of Scotland to a rapid and conclusive end.”

Alexander was accompanied by Lachie MacDonald and Donnie MacKay, respectively Chief Executive and Energy Advice Service Co-ordinator for Lochalsh & Skye Housing Association.

SSE’s Dr. Richard Westoby commented: “We agree that consumers need a fair deal on energy prices. That’s why we’ve been campaigning on behalf of all of our customers to eliminate the cause of regional price differentials across the UK.  

“Earlier this year, we raised the issue of regional pricing with the Competition Markets Authority (CMA) as part of their inquiry into the UK energy market. We hope that they listen to our proposals.  Currently, the charges for using networks – the pipes and wires that deliver gas and electricity to people’s homes – vary by region with 14 different charges across Great Britain’s electricity market. This reflects the higher costs to build and maintain the networks in areas of the country where there is rough terrain and more rural communities, or where more investment is required.  

“Customers pay this network charge, no matter whether they are with SSE or any other energy supplier, through their energy bills. It’s the way the market has been set up to pay for the maintenance of electricity networks.

 “To help make things fairer and simpler, we think these costs should be ‘flattened out’ to one standard charge for every customer across Great Britain.

 “This ‘national’ approach to the pricing of electricity and gas would mean that a customer living in Benbecula, Bristol or Bradford, would pay the same networks charge, reducing some of the complexities of energy for customers. The vital networks upgrade work would be funded, but the costs would be spread across all electricity customers.”

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