Energy bosses defend prepayment meters despite Ofgem clampdown
Energy bosses have called for the current ban on prepayment meters to be lifted, and for suppliers to have the power to impose installations on customers.
Senior figures across major energy firms called for Ofgem’s embargo on prepayment meters to be lifted, in a grilling from a panel of MPs in Westminster in a today.
Chris O’Shea, chief executive of British Gas owner Centrica, told the Energy Security and Net Zero Committee that vulnerable customers risked suffering increasingly high debts without some form of enforcement to contain energy usage.
“I think we have to balance the effort between allowing people to run up bills they can’t repay and making customers retribute respectfully,” he said.
Rachel Fletcher, group director of policy and regulation at Octopus believed forced prepayment meters should be permitted again as long as they are installed “responsibly,” with “smart prepayment meters only.”
This position which was backed Eon UK’s chief executive Chris Norbury.
EDF’s managing director of customers Philippe Commaret and Simon Oscroft, co-founder of So Energy, were also not in favour of a prepayment meter ban being made permanent.
Last month, British Gas revealed in its half-year results that the supplier has seen a £173m increase in bad debt.
Meanwhile, debt counselling charity Step Change revealed that 55 per cent of its clients with dual fuel tariffs were in arrears as recently as July, while anti-fuel poverty charity National Energy calculates 6.3m people are still in fuel poverty heading into October.
This raises the prospect of increasingly high debts across households heading into winter, when demand will be at its peak, with minimal support on offer to customers despite the price cap being near double pre-crisis levels at £1,923 per year.
Ofgem has imposed an industry-wide moratorium on forced prepayment meter installations since January, preventing suppliers from using them to contain customer debts without consent, as first revealed by City PM
The issue is particularly sensitive following British Gas’ use of third party operators Arvato Financial Services to forcibly install prepayment meters in the households of vulnerable customers, which was uncovered in The Times’ investigation into the practice.
Suppliers are now required to sign up to a new code of practice for customers, which includes exemptions for vulnerable customers such as making energy users over the age of 85 without someone else in the home ineligible for forced prepayment meters.
A date for reviving the usage of prepayment meters has not yet been confirmed by Ofgem, which is set to publish a market compliance review into the practice this autumn.