Investigation into Community Energy Scheme UK Ltd and Community Energy Scheme Stoke Ltd's compliance with consumer protection legislation
Investigation
- Open
- Decision proposed
- Closed
- Publication date
- Industry sector
- Supply and Retail Market
Case closure - 19 July 2024
On 27 October 2023, Ofgem announced that it had accepted actions Community Energy Scheme UK Ltd (“CES”) and Community Energy Scheme Stoke Limited (“CESS”) had proposed to take to address key concerns regarding sales practices conducted up to September 2019, existing and new contracts signed by consumers and billing information provided to consumers about charges applied and whether charges are estimated.
Since October 2023, Ofgem has been monitoring the implementation of the agreed actions. CES/CESS has provided information showing that the agreed actions have been completed and, therefore, Ofgem has decided to close the investigation.
Based on the agreed actions:
- Some consumers that signed up to the Community Energy Scheme (the “Scheme”) prior to 30 September 2019 had a one-off opportunity to leave the Scheme for free. These consumers received a letter from CES/CESS noting that if they decided to leave the Scheme, they would have 90 days to communicate their decision to CES/CESS. These consumers then had, from the date they communicated their decision to CES/CESS, 150 days to contact CES/CESS and agree an appointment to allow CES/CESS to re-configure the solar photovoltaic (“PV”) system. Consumers also had to pay or agree a payment plan for any outstanding bill for solar electricity they had consumed. No individual claims or unilateral demands of any kind were discussed or agreed in relation to this action.
Those consumers who decided to accept the one-off opportunity to leave the Scheme for free had their solar PV system re-configured and are no longer part of the Scheme.
Information provided by CES/CESS indicates that a small number of consumers communicated their decision to accept the one-off opportunity leave the Scheme for free, but did not engage with CES/CESS to arrange an appointment to reconfigure the solar PV system within 150 days. These consumers therefore remain in the Scheme.
- CES/CESS would ensure that contracts signed by consumers reflected legal requirements by adding a termination clause. This included the existing contracts of consumers who signed up to the Scheme before 30 September 2019 and not accepted the one-off opportunity to leave the Scheme for free, as well as the existing contracts of consumers who signed up to the Scheme after 30 September 2019.
All existing and new contracts have been amended to include a new termination clause, allowing consumers to leave the Scheme at any time by paying a termination fee. The termination fee was calculated by CES/CESS based on the characteristics of the solar PV system installed and would be reduced for each of the remainder of the contract.
- CES/CESS has amended the bill format of monthly, quarterly and final bills with the aim of providing clear information on whether the bill is an estimated or actual bill, what the charges are, and the amount owed or in credit. These changes were introduced in September 2023. We consider that having this information should help consumers understand their solar energy consumption and/or raise any queries or complaints with CES/CESS. Information provided by CES/CESS also shows that monthly and quarterly bills have been issued regularly since October 2023.
Ofgem considers the implemented actions have had the effect of achieving a similar outcome to that the Authority may have obtained by exercising its enforcement powers to seek a court order or formal undertakings.
If consumers require any assistance in dealing with the Scheme, they should contact the Citizens Advice consumer service to seek advice on the conduct of CES and CESS. The Citizens Advice consumer service provides free, confidential and impartial advice on consumer issues, including energy.
For further information, local Stoke-on-Trent residents can contact Citizens Advice Staffordshire North and Stoke on Trent (CASNS) on 01782 408625 or moneyadvice@casns.org.uk.
Case Update – 27 October 2023
On 20 August 2021, Ofgem announced the opening of the investigation to consider whether Community Energy Scheme UK Ltd (CES) has contravened consumer protection legislation through its sales and customer service practices.
CES operates the Community Energy Scheme (the “Scheme”) whereby it installs solar photovoltaic (PV) panels on the roofs of social housing in Stoke-on-Trent and sells the electricity from these panels to the tenants.
In December 2022, the scope of the investigation was widened to include Community Energy Scheme Stoke Limited (‘CESS’), another legal entity contracting with consumers.
After a thorough examination of relevant law, and the evidence gathered during the investigation, Ofgem has used the powers that were available to the Authority to tackle current concerns related to the Scheme.
As a result, following Ofgem’s investigation, CES and CESS have offered to implement actions that we consider will address key concerns regarding sales practices conducted up to September 2019. CES and CESS have also agreed to amend existing and new contracts signed by consumers, adding a termination clause which will allow consumers to leave the Scheme at any time (by paying a termination fee calculated on the characteristics of the Solar PV system installed and whose amount reduces for each of the remaining years of the contract). CES and CESS have also amended their bill format to provide clear information to consumers about charges applied and whether charges are estimated.
The offered actions will remedy key concerns identified during the investigation and will ensure contracts signed by consumers reflect legal requirements. Therefore, Ofgem has decided to accept them.
Based on the agreed actions:
- Some consumers that have signed up to the Community Energy Scheme prior to 30 September 2019 will have a one-off opportunity to leave the Scheme for free. These consumers will receive a letter from CES/CESS within 30 days of this announcement, i.e. by 27 November 2023, and will have to decide if they want to leave the Scheme.
a) If they decide to leave the Scheme, they will have 90 days to communicate their decision to CES/CESS. They will then have 150 days to contact CES/CESS and agree an appointment to allow CES/CESS to re-configure the Solar PV system. Consumers will also have to pay or agree a payment plan for any outstanding bill for solar electricity they have consumed.
b) If these consumers decide they want to remain part of the Scheme, they will have their contract amended to include a new termination clause. CES/CESS considers that the easiest and best way to achieve this result would be for consumers to sign up a revised contract which will include the new termination clause. However, CES/CESS have also agreed that if consumers remain part of the Scheme but do not sign the revised contract, their existing contract will still be considered amended to include the new termination clause.
- Consumers that have signed up to the Scheme after September 2019 will receive a letter within 30 days of this announcement, i.e. by 27 November 2023, with the effect to amend their contract to include a new termination clause. The letter will ask them to sign up a revised contract that includes the new termination clause. However, if consumers do not sign the revised contract, their existing contract will still be considered amended to include the new termination clause.
- CES and CESS have amended the bill format of monthly, quarterly and final bills with the aim of providing clear information on whether the bill is an estimated or actual bill, what the charges are, and the amount owed or in credit. These changes were introduced fully in September 2023. CES and CESS will also continue working to ensure monthly and quarterly bills are issued regularly.
Given the circumstances of the case, Ofgem considers that these actions will have the effect of achieving a similar outcome to that the Authority may obtain by exercising its enforcement powers to seek a court order or formal undertakings. Therefore, Ofgem has decided to accept the offered actions. The case will remaining open for the sole purpose of monitoring implementation of the agreed actions and, when these are completed, the case will be formally closed.