The energy watchdog has urged suppliers to suspend installation of enforced prepayment meters for the next six weeks.
In a letter sent to energy companies on Wednesday, Ofgem asked them to stop forced installations and long-distance transmissions to prepayment meters by the end of March 2023.
Ofgem said all domestic suppliers have agreed.
The regulator will advise on how companies should use prepaid meters and whether the rules should be changed.
Next week, on February 21, it will issue an update on the scope and timeline of its market compliance review on prepaid meter installations and remote mode switching.
- Companies have been asked to stop installing prepayment meters
- British Gas debt agents break into homes of vulnerable people
Energy companies suspended forced meter installation after it was revealed British Gas agents had broken into the homes of vulnerable people to install meters.
After the story was published by The Times, Chris O’Shea, the boss of Centrica, which owns British Gas, told the BBC: “This is totally unacceptable.”
Ofgem said: “The energy crisis is no excuse for unacceptable behavior towards customers, particularly towards customers in vulnerable situations.”
It urged suppliers to suspend installations and review the use of court orders to enter the homes of customers who are behind.
British Gas said it will pause installing prepaid meters until at least after the winter. Wednesday’s letter said the suspension will last until spring.
The letter reveals that during a meeting last week, Ofgem urged suppliers to stop compulsory installations.
It clarified: “For the avoidance of doubt, this includes stopping installation by warranty, stopping remote smart meter conversion to prepayment without the customer’s express consent, and stopping new court claims for installation guarantees — unless theft is involved.” is suspected.”
Ofgem said some suppliers had warned that bad debt could rise if prepayment meters could not be fitted.
That would increase their costs, the suppliers said, which in turn could lead to higher bills for other customers.
The regulator said it is looking closely at how customer debt affects suppliers’ costs and is working to “determine what actions we need to take”.
There are over four million UK households with prepayment meters. The current rules state:
- Customers pay for their energy in advance, either through an account or with a top-up card. Emergency credit is available
- The cost per unit of energy is higher than direct debit due to the associated costs for suppliers. Sometimes it’s the only option for people who already have debts with a supplier
- Some customers who don’t pay regular bills can be switched to prepay, either remotely via a smart meter or physically based on a court order
- Suppliers must have exhausted all other options before installing a prepaid meter and should not do so for vulnerable customers, including the elderly and customers with young children
They could be amended following Ofgem’s consultation, which will include discussions with energy suppliers, consumer groups and charities to examine rules and guidance on the use of prepaid meters, not only during “the current exceptional circumstances” but also going forward .
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