U.K. efficiency law

Aug. 23, 1999
The U.K. government plans to extend into the gas supply sector legislation that requires electricity supply companies to help out poor customers.

The U.K. government plans to extend into the gas supply sector legislation that requires electricity supply companies to help out poor customers.

The details are spelled out in a consultation document published by the Office of Gas and Electricity Markets (Ofgem), which addresses government concern about "fuel poverty" in Britain (OGJ, May 31, 1999, p. 35).

The proposals, published as "Energy efficiency-a consultation document," are aimed at promoting energy saving as a means of reducing poor people's fuel bills.

Ofgem said the proposals build on existing standards for electricity companies that run until Mar. 31, 2000. The measures would require suppliers to spend £1/year for every gas and electricity customer.

Energy Minister John Battle announced that government would introduce legislation "when parliamentary time permits" to add the proposals to statutory obligations on gas and electricity suppliers starting Mar. 31, 2000.

Variety of schemes

The Energy Saving Trust (EST), a nonprofit distributing company set up in 1993 by government and major energy companies, welcomed the proposals.

An EST official explained that electricity companies have been required since 1994 to spend £1/year on each customer and have done this through their own schemes or in joint programs with local authorities and charities.

"The type of schemes vary," said the official, "from the provision of free or cut-price energy-saving light bulbs to the installation, either free or subsidized, of cavity wall or loft insulation in homes.

"We expect the gas sector schemes to take a similar approach, but focusing, say, on better heating schemes, such as condensing boilers, and the fitting of new control systems, as well as installing insulation."

The proposals are intended to affect all 19 million U.K. gas customers: 60% of the £1/customer raised would be spent on the "fuel-poor," while 40% would be spent on providing incentives for others to improve energy efficiency in their homes.


While the proposals are not yet law, there is little doubt that they will become so, since the government is keen to legislate for a long-term funding mechanism.

Tony Boorman, deputy director general of Ofgem, said that the existing standards have worked well in helping electricity customers, particularly those who struggle to pay their fuel bills.

"We are keen to see the success of the present scheme maintained and extended," said Boorman, "so that gas customers can also benefit. We also want to ensure a smooth transition to standards that the government aims to set in the future."

EST Chairman Peter Lehmann said: "We will be arguing for a contribution of about £2/year for each gas and electricity customer-the same level as has recently been proposed by the Northern Ireland energy regulator.

"The present £/year per electricity customer contribution has remained the same since standards were introduced in 1994; set against inflation and consistently falling gas and electricity prices, the energy efficiency contribution can be increased without a real rise in energy bills."