A MAJOR change to the rules for millions of hard-up energy customers has been proposed.
The energy regulator Ofgem wants to make new rules brought in to protect struggling customers a compulsory part of licence conditions for suppliers.
1
The voluntary code of practice, unveiled in April, bans forcibly installing prepayment meters (PPMs) into the homes of people over the age of 85.
It also gives extra protections to vulnerable households, including £30 free bill credit to customers moved onto a PPM.
All UK household energy suppliers signed up to the code, but regulator Ofgem said it now wants to make the voluntary agreements binding.
The regulator has also proposed that suppliers get compensated for offering additional support credit for the most vulnerable customers.
This is the help which suppliers are obliged to offer to PPM customers in need when they have exhausted all other options.
Ofgem says this compensation will be set at around £13 per PPM household in total over 12 months.
But while households will foot this bill, the regulator said it doesn’t actually expect households to pay more as a result.
This is because of the government’s commitment to remove the PPM premium will balance out the difference.
Most read in Money
The PPM, or “poverty premium“, is the price difference between customers who pay for their energy via direct debit, and those who have PPMs in their homes.
In the Spring Budget, the Chancellor promised to abolish the difference for all four million prepayment meter customers.
Households across the country will see their prices lowered to match the costs of those who are billed by direct debit from July.
Neil Kenward, director for strategy for Ofgem, said: “The voluntary code of practice for prepayment meters enhanced protections, setting clear rules for when a prepayment meter is or isn’t acceptable, as well as new requirements around the installation of prepayment meters.
“We are now seeking to make these voluntary arrangements binding, and we welcome all views on this statutory consultation.”
The consultation on the code of conduct will close to responses on July 26.
Ofgem expects to conclude and publish its decision by winter this year.
Prepayment meter installation practices have been in the spotlight after some energy suppliers were found to be breaking into the homes of people struggling to pay their bills to forcibly install them.
The new rules mean tougher oversight of installations enforced under warrant or when customers are remotely switched without consent.
Warrants give energy firms the legal right to enter homes and install the meters.
Energy suppliers can also switch customer smart meters over prepayment mode remotely.
They can do this to help recover a debt if a customer can no longer afford their bills.
Usually customers are forced on to the meters if they fall into debt with their energy bill and the supplier has been unable to contact them for a prolonged period of time.
Under the new rules, suppliers will now have to make at least ten attempts to contact a customer.
Sun Money called for a ban on moving households onto prepayment meters back in August last year.
An investigation by The Times revealed how vulnerable customers – including disabled and mentally ill people – were being forced by British Gas on to the pay-as-you-go meters or having their gas switched off.
Firms were temporarily banned from installing prepayment energy meters under warrant.
What other cost of living help is available?
Millions are also in line to receive cost of living payments worth up to £1,350.
The first instalment of the £900 payment has been paid to millions on certain benefits, including Universal Credit and Pension Credit.
Meanwhile, a £150 payment and between £150-£300 payment has started to be paid to to millions with disabilities and pensioners.
You may be entitled to the £150 disability cost of living payment if you receive any of the following benefits:
- Attendance Allowance
- Constant Attendance Allowance
- Disability Living Allowance for adults
- Disability Living Allowance for children
- Personal Independence Payment
- Adult Disability Payment (in Scotland)
- Child Disability Payment (in Scotland)
- Armed Forces Independence Payment
- War Pension Mobility Supplement
Plus, pensioners who are entitled to a Winter Fuel Payment for winter 2023/24 will get an extra £150 or £300 paid on top of their normal payment from November this year.
You will be eligible for a Winter Fuel Payment this winter if you were born before September 25, 1957.
Those eligible for the payment will receive a letter in October and November telling them how much money to expect.
Energy suppliers also offer plenty of energy grants and schemes to help you out if you’re struggling.
Here’s a list of schemes open right now:
- British Gas Energy Trust Individuals and Family Fund
- British Gas Energy Trust
- EDF Customer Support Fund
- E.ON and E.ON Next Grants
- Octopus Energy Assist Fund
- OVO Energy
- Scottish Power Hardship Fund
There’s a one-off fuel voucher from your energy supplier if you’re on a prepayment meter.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
You can also join our new Sun Money Facebook group to share stories and tips and engage with the consumer team and other group members.
