Ofgem introduces package of measures to help prevent self-disconnection and self-rationing by prepayment meter customers

New requirements that come into effect on 15 December 2020 include provision of emergency credit and allowing more time to make repayment arrangements

The energy supply regulator Ofgem has confirmed that it is introducing a package of measures to help consumers who are struggling to pay their energy bills.

Following two years of stakeholder engagement and its June 2020 statutory consultation, Ofgem says that its new measures will improve outcomes for prepayment meter customers who go off supply or ‘self-disconnect’ or who deliberately limit or ‘self-ration’ their energy use.

In particular, the new measures, that will take effect from 15 December 2020, include requirements for suppliers to -

• offer emergency credit - a fixed amount of credit provided to customers when their meter runs low or runs out, to ensure continuity of supply;
• offer ‘friendly hours credit’- provided overnight, at weekends and public holidays, when top-up points may be closed and a customer’s prepayment meter runs low or runs out;
• offer extra prepayment credit for households in vulnerable circumstances to provide more breathing space while working out alternative arrangements to pay; and
• ensure that they put customers in debt on realistic and sustainable repayment plans - which in practice means that suppliers will have appropriate credit management policies, make proactive contact with customers, and set repayment rates based on ability to pay.

NB - these changes put the voluntary principles agreed in March 2020 - where energy supply companies committed to supporting vulnerable customers in response to coronavirus (COVID-19), including provision of practical support with top-ups, provision of advice, switching between credit and prepayment mode, and extending non-disconnection periods - onto a formal footing.

Commenting on the measures, Director of Retail at Ofgem Philippa Pickford said -

‘Suppliers have stepped up to the challenge of supporting their customers during the COVID-19 crisis, especially those in vulnerable situations.

Customers who are struggling to pay their bills should contact their supplier as soon as possible. The extra protections we have announced today will help ensure they get some breathing space this winter.

“Alongside our wider programme of support for vulnerable customers, Ofgem has also capped and reduced default tariffs so these customers always pay a fair price for their energy.'

For more information, see Ofgem strengthens protections for customers struggling with energy bills this winter from ofgem.gov.uk