Spark Energy’s £2 a day prepayment tariff will tackle fuel poverty in social housing
May 06, 2015 by Spark Energy
Spark Energy, the niche energy supplier to the lettings market, is to introduce a special tariff aimed at prepayment meter (PPM) customers living in affordable social housing.
The tariff is aimed at making it possible for these customers to have a dual electricity and gas supply for as little as £2 a day.
The new Affordable Social Housing Prepayment Tariff will be the UK’s cheapest prepayment tariff and the only one that doesn’t have ‘hidden’ charges in the form of a standing charge.
The new tariff will have:
- No tie-ins or exit penalties
- A zero standing change to reduce the impact on customers with low levels of energy consumption and eliminate costs to housing bodies when properties are empty
- A unit rate that’s comparable with Direct Debit tariffs
- Paper statements as standard - but an online account will be provided
Spark has been given a derogation, which is official permission, by regulator Ofgem that enables the company to offer the additional tariff alongside the four core tariffs allowed under standard Ofgem rules.
The rules, under Ofgem’s Retail Market Review, say that tariffs have to be offered to all customers, but in its reply to Spark’s application Ofgem said that it was “open to considering derogations when they are targeted towards social schemes and at addressing the needs of customers in vulnerable situations”. While not all prepayment customers are on low incomes, they face fewer tariff choices in the market.
It was recognised that the new tariff did not undermine the objectives of Ofgem’s Retail Market Review and that it “would be beneficial to eligible consumers”.
Spark Energy CEO Chris Gauld said: “People in social housing are on the lowest incomes, use prepayment far more and so find it harder to actively engage in the market to find cheaper deals. We exist to give tenants in the UK a better deal as standard without the need to constantly switch – something that isn’t always practical for those who rent – and to help housing bodies reduce their costs and administration. Those in the affordable social housing sector are uniquely disadvantaged in the market.
“We have been working with Ofgem to find a way of creating a solution to this problem which complements our offers in the private rented market. I’m pleased that our team and those at Ofgem have shown the flexibility and willing to achieve this derogation which provides something different and better for tenants. Its great recognition of the knowledge we have in the sector.
“By creating this tariff we are addressing the issues that uniquely affect millions of homes, and by meeting the concerns of social housing providers we are helping them become actively involved in getting social tenants a better deal.”
Spark is already working with or has active enquiries with social housing providers who have a total stock of 780,000 homes, but the UK as a whole has 4.5m social households. It is inviting enquiries from all providers.
A feature of the new tariff is that Spark will put £5 credit per fuel on the ‘top-up’ cards for the social housing provider when the property becomes vacant - easing administrative issues such as access to power during the void period between tenants. The residual amount will pass to the new tenant.
The new tariff will be available from June 1 2015.
- Read the story in Utility Week - Ofgem grants Spark Energy an extra prepayment tariff
- Read the story in Inside Housing - Energy watchdog sanctions new pre-payment tariff