The head of National Grid has warned that many British households would find this winter “financially very, very hard”, despite government support to limit the rise in gas and electricity bills.
John Pettigrew, the chief executive of the company that oversees Britain’s electricity and gas systems, told the Financial Times he was “under no illusions” about the struggles many people would face during the colder months, despite a universal subsidy on all domestic energy bills until April.
“Even with the [taxpayer-funded] price cap this is a doubling-up of what people are used to paying for their energy bills,” said Pettigrew. “Therefore inevitably there are going to be people who are going to struggle.”
The government has capped the unit cost of energy until April, which would mean a typical household would pay about £2,500 on average over a year. But last winter the equivalent figure was £1,277. Each household will also receive a £400 rebate on energy bills with additional means-tested payments through social security benefits.
But charities have warned the help will not be enough to avoid 7mn households, or a quarter of all homes, experiencing “dire fuel poverty”.
Pettigrew said that when the support ended in April a more targeted scheme to help those households in the most need seemed the best solution. “Something like a social tariff makes a lot of sense.”
His call mirrors that of some big energy suppliers, such as ScottishPower, that have been pushing the government to set up a subsidised “social” energy package that would apply to the most vulnerable customers.
Pettigrew was speaking ahead of the announcement on Tuesday that National Grid was setting up a £50mn fund to cover the next 18 months, which it will distribute to organisations such as the Fuel Bank Foundation and Citizens Advice that assist households struggling with the cost of living crisis.
Although National Grid does not supply electricity or gas it receives a proportion of all bills to pay for the management of the energy grids and oversee the country’s electricity and gas systems. These so-called network charges, which are distributed among a number of companies, make up about 10 per of a domestic bill.
Simon Francis of the End Fuel Poverty Coalition said energy companies were fast recognising they had a “moral obligation to step in and help” struggling households.
Pettigrew insisted that National Grid, which made underlying profits of £4bn during the year to March 31, was not launching the fund to try to head off a potential backlash against the energy industry as the cost of living crisis spirals.
He said the energy price crisis, which was exacerbated by Russia’s invasion of Ukraine, was “bigger than any one individual company can address and . . . what we are trying to do is be responsible and play our part”.
Pettigrew, who was paid £6.5mn last year, added that the company in May announced it was returning £200mn to bill payers after generating strong earnings from the import and export of power to other European countries via subsea cables.
National Grid in October warned households to prepare for the possibility of rolling blackouts this winter if, in the “unlikely” scenario, Britain couldn’t import sufficient energy from continental Europe during periods of high demand.
Pettigrew said the company’s “base” scenario was for the country to have sufficient supplies to meet demand this winter. He added that unseasonably warm weather in recent weeks had helped countries in the EU to fill their gas storage facilities as there had been less demand for heating purposes.
Source: Economy - ft.com
