The UK energy regulator is exploring the possibility of implementing a system to levelise energy charges across various payment methods.
This initiative aims to address the current discrepancies in costs that consumers face based on how they pay for their energy bills, through prepayment meters or direct debits.
The concept, known as “levelisation,” would involve creating a more balanced cost structure for different payment methods.
The proposal comes after a Call for Evidence was conducted in April.
Ofgem said the majority of responses expressed support for the introduction of a levelisation process- many respondents underscored the vulnerability of prepayment meter customers and the need to eliminate standing charge premiums, particularly during periods of low demand or self-disconnection.
The regulator believes that the current disparities in standing charges could potentially contribute to customer debt and even disconnection in some cases.
The consultation document outlines the case for a market-wide levelisation process, both within and outside the cap.
It seeks views on various aspects, including the proposed approach to levelisation, considerations for cost balancing and potential mechanisms for reconciliation between energy suppliers to support the new approach.
