Energy regulator Ofgem has today announced new measures to enhance rules protecting struggling prepayment meter (PPM) customers and addressing debt-related costs.
Earlier this year, all energy suppliers agreed to a voluntary Code of Practice after concerning evidence of forced PPM installations came to light.
Today, Ofgem has launched a statutory consultation to make these protections mandatory as part of suppliers’ license conditions.
The energy regulator has also proposed a £13 allowance within the PPM price cap – this allowance would enable energy suppliers to recover bad debts associated with Additional Support Credit (ASC), which they are obligated to provide to PPM customers in need, especially during periods of high energy prices.
Ofgem does not anticipate the ASC bad debt allowance resulting in higher bills for PPM customers compared to those on Direct Debit in 2023/24.
This expectation is based on the government’s commitment to eliminating the PPM premium.
Neil Kenward, Ofgem’s Director for Strategy, said: “This type of credit helps some of the most vulnerable PPM customers, by providing them with additional respite, when they are struggling the most, and prevents them from going off supply.
“Many of these customers may have already exhausted alternative options, such as emergency or friendly hours credit, so ASC can be critical to avoiding self-disconnection.
“Some of this credit may not be repaid, but energy suppliers do not currently get compensated for this cost – the allowance aims to fix that, ensuring suppliers have no excuse not to offer ASC to customers in need this winter. We will be monitoring levels of ASC provided by suppliers.”
