Official Report: Minutes of Evidence

The Chairperson (Mr Brett): I welcome our colleagues from the Consumer Council. You are very welcome. Thank you very much for coming before the Committee today. I will hand over to you, if you are content.

Ms Noyona Chundur (Consumer Council for Northern Ireland): Thank you very much. Thank you for your patience in allowing us to get here. Good morning. We really appreciate the opportunity to meet you all. The Committee will know that the Consumer Council is Northern Ireland's statutory consumer body. For 40 years, we have played a vital and evolving role in protecting, representing and empowering consumers.

Northern Ireland's journey to energy decarbonisation is no different. We are here to support people and communities to actively participate in the transition, which presents opportunities and challenges. We do that by providing a free and independent consumer complaints service — I am a bit out of breath from running from the car park to come and meet you — delivering consumer information, outreach and education campaigns; representing consumer interests to government, industry and civil society; and conducting reviews of regulated standards of service and codes of conduct, but also influencing the evaluated performance frameworks of regulated suppliers; and conducting research to improve our understanding of consumer needs.

The energy transition will change how we generate and use energy. Consumers already have quite a clear sense of what they want from future protections. We know that because they have told us. They want trusted, accessible information. They want tariffs that fit need and affordability. They want help with costs, including upfront costs. They want support for those who need financial help, and they accept that not everyone will need financial help. They want absolute protection when it comes to safety, fraud, obsolescence and mis-selling. They would like to see not only guarantees and price caps for future technology and equipment but certification, registration and standards for installers, as well as clear and easy arbitration for all energy types. What that shows is that energy is complex, and it is complex for everyone.

Our job at the Consumer Council is to help to make the decarbonisation journey as simple and as accessible for everyone as we can. That will require us to work together and to co-design solutions to deliver a transition that is based on trust, fairness and a collective openness to innovation so that we can deliver the best outcomes for people, communities and the public purse. The Utility Regulator (Support for Decarbonisation Preparation) Bill — it is a bit of a mouthful — is a welcome and important step towards achieving that, and we look forward to working with all our stakeholders as the legislation progresses. I am very happy to take whatever questions you may have for us.

The Chairperson (Mr Brett): Thank you very much. Part of the call for evidence from the Committee's perspective is to be informed by those who are at the coalface engaging with consumers about what further changes the legislation could achieve and whether there are further opportunities that the Committee could take to strengthen the legislative provision proposed by the Department so that, ultimately, the Bill delivers for consumers and, overall, is beneficial to Northern Ireland's current energy trajectory. From the Consumer Council's perspective, is there anything in the Bill that could be strengthened so that we can try to achieve our shared aims?

Ms Chundur: Thank you for that question. I do not believe that we are asking for any amendments at this stage. We see it as a very enabling piece of legislation. It is the first step in a stepped process to help us to work collectively to build regulation protections and wider support for a future energy system. The key piece in the Bill, which we have noted, and it is in our written submission, is to extend the regulator's legal vires beyond electricity and gas, because our energy sector is much more than electricity and gas.

The Bill is an important step. It is the right thing to do, and looking at what communities and people need moving forward is, in our view, a very pragmatic and proportionate approach.

The Chairperson (Mr Brett): Do you want to say anything to the Committee about the recently agreed memorandum of understanding (MOU) between the Utility Regulator (UR) and you?

Ms Chundur: That is in place between our organisations and underpins the close collaboration between the Utility Regulator and the Consumer Council. The Committee will know that the Energy (Northern Ireland) Order 2003 creates a dual framework within which the regulator and the Consumer Council operate. For example, as the economic regulator for electricity and gas, the Utility Regulator protects consumers principally through its powers of licensing, monitoring, information gathering and enforcement orders, but also through financial penalties. Through the same Energy Order and our founding legislation, which is the General Consumer Council (Northern Ireland) Order 1984, we protect and represent consumer interests through representation, complaint investigations, research, advocacy and independent scrutiny of regulated suppliers. We do so in partnership with suppliers and the regulator in respect of standards of service, codes of conduct or, as I have highlighted, influencing their performance frameworks. Those are two sides of the same coin of consumer protection, and that very much places the regulator and the Consumer Council alongside the Department and other actors in developing something that is future-proof and will work for all consumers and communities in Northern Ireland.

The Chairperson (Mr Brett): You have no concern about an overlap of your work with that of the UR, do you? You may have seen in some of the evidence that the Committee has received to date that some people want to see the UR's powers extended to match those of Ofgem so that it would deal with complaints. That is a role that you currently discharge very well.

Ms Chundur: Thank you for saying that.

The Chairperson (Mr Brett): Do you have any concerns about possible overlap between the work of the two organisations?

Ms Chundur: Provided that both organisations deliver their roles and responsibilities through the respective prisms of economic regulation and consumer advocacy, I do not see there being any overlap. We have worked with the Utility Regulator since its inception, and I would like to think that we have a strong, collaborative relationship. The future system is yet to be designed. That is key. However, we also need something that works for Northern Ireland and the people here, so we would not advocate copying the Ofgem model just because Ofgem does it in GB; it is about finding a solution that works for Northern Ireland and the people who live here.

The Chairperson (Mr Brett): Of course. Thank you. That is all from me.

Ms D Armstrong: Good morning, Noyona and Raymond, and thank you for your presentation. At the outset, Noyona, you mentioned that the response to your consultation highlighted the fact that, from the consumers' point of view, tariffs should be affordable, people should have help with upfront costs, and there should be assurances that they have trusted installers who adhere to the regulations. Given that the energy transition is likely to involve significant investment in the network's generation system, services and technology, what safeguards are necessary to ensure that consumers, particularly those in fuel poverty, do not bear a disproportionate weight of the costs?

Ms Chundur: That is a great question, Diana, thank you. The principal safeguard is putting consumers at the heart of the energy transition and ensuring that we can adequately reflect their lived experiences and the journey that we want them to embark on when it comes to regulatory protection and enforcement action. There is also the broader advocacy space: we are undertaking research to better understand the trade-offs, the investments and the help — financial and otherwise — that consumers will need to see.

Another key part of the energy transition is behavioural change. As people and communities, we have to feel confident to participate in that transition. Diana, you will know that that can mean different things to different people, particularly in the case of vulnerable groups, including rural groups, because the experiences of rural consumers will be different from those of urban consumers. As I said in my opening remarks, it is a complex picture. The key is to ensure that the consumer is placed at the heart of policymaking and at the heart of regulatory reform and that a constant sense check and conversation happens with people and communities so that it can be plugged into that development. The other thing that I should add is that that should happen at the start of the process. It should not come at the end of a process or halfway through. Ask people what they need and test it with them. Make them part of the collective conversation that we need to have. I hope that that answers your question.

Ms D Armstrong: Yes, thanks, Noyona. As a result of that — this is probably an aside from discussing the Utility Regulator — do you feel that the Consumer Council is adequately resourced for taking on its role of supporting consumers as we move towards renewable energy?

Ms Chundur: I believe that the Consumer Council is adequately resourced today to deliver the roles and responsibilities that we need to carry out for consumers. It is very difficult for me to answer the question about the future, Diana, until we start the process to shape that system. I do not think that anybody can answer that, and that goes back to that very collaborative partnership working process that we will need with the regulator and with not only the Department for the Economy but other Departments. The energy strategy is an Executive strategy that is delivered by the Department for the Economy. However, energy transition impacts on everybody, so we all need to be part of that conversation.

Ms D Armstrong: Thank you very much.

Mr Honeyford: Thanks for coming in, and thanks for your evidence. We talked previously about home heating oil, and you talked about transparency in that area. Is it a missed opportunity to not include that in this Bill?

Ms Chundur: In the current Bill?

Mr Honeyford: Yes. If we are giving the Utility Regulator additional power and 60% or 70% of households in Northern Ireland are on oil, surely, if we are talking about decarbonisation, we need to talk about all of it.

Ms Chundur: Yes, we do. If I may say so, David, I think that this is about how we transition Northern Ireland from fossil fuels, so it is a wider conversation than looking at just heating oil. You make a really important point. How successful Northern Ireland's decarbonisation is will depend on how quickly it transitions from fossil fuels and moves to more sustainable energy options. Heating oil is, obviously, part of that mix. The advice, information, discussion and debate around what regulatory framework, protections, incentives or supports are needed have to be part of a wider conversation.
You did not touch on this, but you may have intended to ask about it as a follow-up question. We also need to be mindful of the cost of home heating oil. Maybe that was at the forefront of your mind. We know that the Competition and Markets Authority's market study highlighted the fact that the majority of the cost that consumers experienced in their bills — over 80% — was coming from wholesale prices. Therefore, there is a real challenge for us as a region to be able to deal with global wholesale price volatility making its way to consumer bills almost immediately, which is what happened earlier this year and in 2022. It is part of a much broader conversation, David, that needs to be given careful thought and choreography.

Mr Honeyford: You went where I had intended to go.

Ms Chundur: I answered the question.

Mr Honeyford: You answered my question. We had a conversation earlier about fuel poverty. I do not think that you can deal with fuel poverty unless you deal with exposure to the price volatility of fossil fuels, the majority here being home heating oil. You have said that you are not asking for amendments, but would you support amendments that tried to introduce those protections?

Ms Chundur: I would always support amendments that increase consumer protection, but I question whether the Bill is the most appropriate vehicle to do that versus a broader conversation about reform and strengthening protection, as well as access and affordability, when it comes to our overall energy mix and the overall energy system. That is perhaps a more pragmatic way to ensure that things are as future-proof as they can be. This involves extraordinary effort from everybody, so we want to make sure that it stands the test of time, is lasting and delivers the right outcome for people. I question whether this is the right vehicle to do that, but I am certainly open to wider conversations, if that helps.

Mr Honeyford: I appreciate that. Thank you very much.

Mr Kearney: Thanks for coming along. You emphasised the collaborative nature of your working relationship with the Utility Regulator. Your submission states:

Is there an implication in that statement that that could happen? If so, if you are not in favour of tabling additional amendments, how will you counter that possibility?

Ms Chundur: Great question. There is not an implication that it could happen. It is, I suppose, a cautionary note: if you are extending the vires of one really important organisation — those of the economic regulator to outside of electricity and gas — given that we occupy a dual regulatory framework through the Energy Order, you cannot forget about the statutory consumer body. We were founded over 40 years ago through the General Consumer Council Order, and that gives us legal powers in consumer affairs in any market. That is through the prism of consumer advocacy; it is not in the same space as economic regulation. Committee members have already highlighted the broader advice and broader support. If you are looking at things like that and at extending roles and responsibilities, you have to do that in partnership and see who else is already performing those functions. It will not just be the Consumer Council; there are other organisations that do that exceptionally well. David brought up heating oil. Currently, when it comes to heating oil, the Consumer Council provides a complaints service free of charge, and the Trading Standards Service has enforcement powers in that regard. There are a number of actors, and we need to be very cognisant of what that looks like. One thing to say is that the Department is very alive to the issues, and it is very helpful that we are working so closely with the Department on the energy portfolio that we deliver. Hopefully, that addresses your query.

Mr Kearney: Thank you.

Ms Forsythe: Thank you, both, very much for coming in. I would like to build on the question that Declan asked. In your submission, you outline the need for role definition and a gap analysis of all the different regulatory bodies. I really appreciate the work that you do, and you engage quite a lot with my constituency office. People are consumers, and they reach out to you, so clear role definition and gap analysis really helps the public. You talked about future resources. If everything is simple and clear, people will not have as many questions. While your submission does not talk about amendments to this enabling legislation, you talk about the need to evolve the wider legislation, such as the 2003 Energy Order, and the statutory frameworks. Is there ongoing work to set those definitions and update those things? You talk about the close relationship with the Department. It definitely helps everyone if all those remits and where the vires start and stop are set out very clearly. Is there engagement with you on that Order and on setting those frameworks?

Ms Chundur: Not in relation to the Energy Order. We do not set policy. We can influence policy and advise on the direction of travel, and we always ensure that our advice is grounded in consumer insights, as you have highlighted. We certainly have not had any discussions or conversations regarding the Energy Order, but, as with other examples of reform, we are confident that the Department will bring us in at the appropriate time. As I said at the start, this Bill is the enabler to start that process, and that is key. We cannot talk about reform and the energy system of the future by talking only about electricity and gas. It is much wider than that, so that is the key. Hopefully, that is —

Ms Forsythe: There were lots of really good points in the submissions. Thank you very much for that.

Ms Chundur: Thank you.

Ms Forsythe: Thanks, Chair.

The Chairperson (Mr Brett): Thank you very much. Colleagues, thank you very much for that. It was useful and insightful. The Committee shares your goal of trying to protect consumers. We look forward to working with you on this and on other appropriate matters.

Ms Chundur: Thank you so much.

The Chairperson (Mr Brett): Perfect. Thank you so much for your time.