MILLIONS of energy customers could benefit from a major change to rules that is being considered by the industry regulator.
Ofgem is reviewing the rules around prepayment meters and is also calling for a cheaper social tariff to be introduced to help struggling households.
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Over the weekend, the government called on energy firms to stop forcibly moving households onto more expensive pre-paid meters.
Grant Shapps has also vowed to “name and shame” the worst offenders.
It comes after Citizens Advice warned earlier this month that an estimated 3.2million households ran out of credit on their prepayment later year, the equivalent to one every 10 seconds.
Sun Money called for a ban on moving households onto prepayment meters this winter back in August last year, as over 4million households already face paying more for energy just because they have one installed.
Today, Ofgem’s chief executive Jonathan Brearley announced a review of prepayment meter rules, specifically focusing on the decisions to move customers on to them.
He warned: “If we find that they have not taken due care in this process, we will take further legal action against them.”
The regulator also called for a “serious assessment of a social tariff”, which would provide a discount to low-income households.
Yesterday, energy firms warned that any change to prepayment rules could lead to higher prices.
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In a speech later, Ofgem boss Jonathan Brearley will say he is “concerned” about the sharp growth in households being switched to prepayment meters, “sometimes without their even knowing about it”.
“The numbers of forced installation of prepayment meters is extremely high. It is simply not acceptable that vulnerable customers are left in the dark and cold in winter,” he said.
The regulator is calling for forced installations to be banned – but it does not have the legal power to completely ban these actions.
It comes as the National Grid is rolling out its Demand Flexibility Service (DFS), under which customers will be paid for cutting down at peak hours to help avoid blackouts.
The scheme went into action last night and will be active again this evening after the Electricity System Operator (ESO) said its electricity supply margins are expected to be tighter than normal.
It has been set up to help lower the nations energy usage at peak-times and to help lower the risk of households facing blackouts this winter.
Energy bills have soared recently due to rampant inflation and the impact of Russia’s invasion of Ukraine.
Even though recent forecasts suggest the energy price cap will be £600 cheaper than previous estimates, according to experts at Cornwall Insights, they will still be more than £1,000 more expensive than in 2021.
Amid mounting concerns that poorer households will face financial ruin when energy bill support is reduced this Spring, energy chiefs have been called for a roundtable later this week.
Suppliers Ovo, Eon, EDF and Scottish Power have called for the government to introduce a “social tariff”, which would keep supporting the poorest households, particularly those on pre-payment meters.
Some energy companies paused payments over Christmas in a bid to help struggling customers.
Last week British Gas announced it will be putting a stop to remotely moving customers onto prepayment meters, unless they request it.
Meanwhile, Scottish Power has stopped recovering outstanding debt from customers who have recently been moved onto prepayment meters.
What prepayment meter help is on offer?
If you’re on a prepayment meter, you might be able to get a one-off voucher to top up.
The fuel voucher scheme comes via the Fuel Bank Foundation charity, and it’s offered through a range of organisations, like food banks and Citizens Advice.
The best place to start is to find somewhere which can offer you a fuel voucher by asking your local council – you can find yours via gov.uk by searching your postcode.
The voucher should help you cover around two weeks’ worth of electricity use.
Some energy companies may also issue their own vouchers, so ask your supplier directly.
Energy companies usually offer emergency credit, though you will have to pay this back.
How much you get and how it’s applied will depend on who your supplier is.
It might be added to your meter when you fall below a certain amount or you might have to ask for it.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
