EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations, which come into force on the 21st day after the day on which they are made, amend the Warm Home Discount Regulations 2011 (the “WHD Regulations”) and the Warm Home Discount (Reconciliation) Regulations 2011 (the “Reconciliation Regulations”). These Regulations extend to Great Britain.
The WHD Regulations established the Warm Home Discount scheme (“the Scheme”), which has been in operation for ten years, up to 31st March 2021. Since 1st April 2020, the Scheme placed obligations on licensed electricity suppliers who have 150,000 or more domestic customer accounts (or who are part of a group of electricity or gas supply companies which together have 150,000 or more domestic customer accounts) to incur spending on providing benefits to customers who are in, or are at risk of, fuel poverty.
The Scheme required those electricity suppliers to provide a rebate in each scheme year to customers specified in notices given by the Secretary of State (the “core group”). These were domestic customers who appeared to the Secretary of State to be, or to have a partner who is, in receipt of state pension credit guarantee credit. It also required licensed electricity suppliers who have 250,000 or more domestic customer accounts (or who are part of a group of electricity or gas supply companies which together have 250,000 or more domestic customer accounts) to incur “non-core spending” by providing the rebate to other domestic customers (the “broader group”) who met their eligibility criteria, and by undertaking “industry initiatives” for the benefit of energy consumers, such as the provision of energy advice or debt assistance.
Regulation 4 amends the WHD Regulations to reinstate the Scheme for a further scheme year. Scheme year 11 will run from the coming into force of this instrument to 31st March 2022.
A number of amendments are made to the WHD Regulations for the new scheme year.
Regulation 5 inserts provision into regulation 4 of the WHD Regulations to take into account notifications of domestic customer numbers made to the Gas and Electricity Markets Authority (“the Authority”) before this instrument comes into force.
Regulation 7 amends regulation 6 of the WHD Regulations so that in scheme year 11 the determination of core group customers by the Secretary of State is based on whether the person, or their partner, appear to be in receipt of state pension credit guarantee credit.
Regulation 11 amends regulation 14 of the WHD Regulations to provide that where a notification has been provided in respect of the preceding scheme year under either regulation 9(7) or 14(3A) or both, the sum of any undelivered prescribed rebates so notified must be added to the relevant supplier’s non-core spending target.
Regulation 12 amends regulation 15A of the WHD Regulations to maintain the limit on spending on industry initiatives for debt write-off at £6 million in scheme year 11.
Regulation 13 inserts a new regulation 17C to enable spending on industry initiatives taking place between 1st April 2021 and the coming into force of this instrument to count towards the non-core spending obligation in scheme year 11.
Regulation 16 amends regulation 26 of the WHD Regulations to allow spending on an industry initiative that takes place before the Authority has approved the industry initiative to be counted if it is subsequently approved.
Regulations 17 and 18 amend regulations 27 and 27A of the WHD Regulations to require suppliers to satisfy the Authority that their proposed industry initiatives, and the Secretary of State to be satisfied that any proposed specified activity, will ensure, so far as reasonably practicable, that advice on the benefits of using a smart meter is provided to domestic consumers benefiting from the industry initiative or the specified activity. Regulation 3(c) amends regulation 2 of the WHD Regulations to add a definition for “smart meter advice”.
Regulation 20 inserts a new regulation 30A to require the Authority to inform the Secretary of State when a supplier of last resort notifies the Authority of the supplier’s intention to meet all or part of a failed supplier’s non-core obligation.
Regulation 21 amends Schedule 1 to the WHD Regulations to set the overall spending target for scheme year 11.
Regulation 22 amends Schedule 4 to the WHD Regulations to limit spending on industry initiatives for debt write-off to a maximum of £2,000 per domestic customer and to remove restrictions on spending on industry initiatives for payments towards gas or electricity bills by allowing such payments to be counted including when provided to domestic customers eligible for core group or broader group rebates. Regulation 22 also amends Schedule 4 to set out requirements relating to installation standards and consumer protection for installations and repairs of boilers and central heating systems delivered as part of industry initiatives. Copies of the publicly available specifications published by the British Standards Institution and referred to in these Regulations can be purchased at www.bsigroup.com or by contacting the British Standards Institution, 389 Chiswick High Road, London W4 4AL. Copies can be inspected by contacting the Warm Home Discount Team at the Department for Business, Energy and Industrial Strategy, 1 Victoria Street, London SW1H 0ET.
Regulations 5(a), 6(b), 7(b), 9 and 11(d) change the deadlines for certain notifications and determinations under the Scheme. The remaining provisions in regulations 3 to 22 amend the WHD Regulations in consequence of the extension of the Scheme and the other changes described above.
The Reconciliation Regulations provide for the operation of a reconciliation mechanism in relation to spending by electricity suppliers under the Scheme. Regulation 23 amends the Reconciliation Regulations in consequence of the extension of the Scheme.
A full impact assessment of the effect that this instrument will have on the costs of business, the voluntary sector and the public sector is available from the Department for Business, Energy and Industrial Strategy at 1 Victoria Street, London, SW1H 0ET and is published with the Explanatory Memorandum alongside this instrument on www.legislation.gov.uk.