UK

EDF renews calls for social tariff and cuts standing charge for some households

Energy bills will remain high this winter, despite a fall in wholesale prices (Peter Byrne/PA)
Energy bills will remain high this winter, despite a fall in wholesale prices (Peter Byrne/PA) Energy bills will remain high this winter, despite a fall in wholesale prices (Peter Byrne/PA)

The boss of EDF’s customer arm in the UK has renewed calls for a social tariff that would give cheaper bills for struggling families as he announced measures to slash their standing charges.

Philippe Commaret said he would ensure that more than a quarter of a million of the homes his company supplies see their standing charges reduced to the levels they were at before the energy crisis hit. They will pay 56p per day in the first three months of next year as a result, not 87p.

But it is “not sustainable” for individual companies to be the ones helping customers, he said. Doing so also risks help not getting to some households if they use a supplier with worse support packages.

“It’s not something that can be enduring, so the reason we are doing it is also to call on Ofgem and Government to think about the way that tariffs are set up,” he told the PA news agency.

“The reality is that the situation since last year has worsened, not only in terms of the number of customers who are indebted, but also in terms of debt per customer. That’s why we believe we need to take action to help the customers who are most in need.”

The number of customers in debt is up 36% and the debt per customer is nearly twice the level it was a year ago.

“Some customers have spent all the savings they had to go through the winter last year.”

He urged struggling customers to get in touch to find ways that EDF can help them.

A social tariff – which mandates companies to supply energy at reduced prices to certain worse-off households – could be designed in several ways.

One option would be to just remove or reduce the standing charge for these customers, another could be to reduce the charge per unit of energy they use.

Mr Commaret advocated the latter approach, and also said that the support cannot be too focused on just the worst-off households as many are struggling.

“What we are seeing is that the number of customers who are struggling are massive, so it can’t be a solution for just a few people,” he said.

EDF’s standing charge support will help at least 260,000 by removing the 55% rise in the standing charge that happened between April 2021 and today.

It is part of an additional £15 million support package that the energy company said it was putting in place to support customers this winter.

The move comes after SSE – which no longer supplies households after selling its domestic business in 2020 – saying on Thursday that it would provide £15 million in support to businesses struggling with their bills.

The help will be targeted at those 20,000 companies who signed an energy deal between August and December last year, when their bills were fixed against the then record wholesale price of energy.

Nikki Flanders, who heads SSE’s customer businesses, said: “With government energy support winding down, we believe this is the right time to step up our customer support by providing a dedicated fund.

“Despite the fact that wholesale energy prices have fallen considerably from last year’s highs, they still remain double the historic norm, which we understand is challenging for many businesses.”