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Ofgem's prepayment rules are too little too late

Ofgem's prepayment rules are too little too late

Suppliers argue that if they cannot recoup customer debts other bill payers will have to fill the gap. Ofgem has proposed a "social tariff" that would charge lower rates to some customers, but that too would need paying for.
The forced installation of prepayment meters (PPMs) is a response to a problem that used to be an aberration.

Because no one can be left without supply, those who flat refused to pay their bills, or stubbornly declined to engage with suppliers about mounting debts, could find a PPM forced on them.

Once installed it was up to them to top it up or face self-disconnection.

When a year's energy costs the typical household less than £1,000 it was an issue that largely affected the poor or otherwise marginalised.

Energy suppliers need to get paid somehow, so the murky practice of courts granting corporations access to private homes was largely conducted in the shadows.

But the energy crisis has made fuel poverty mainstream and it is now the use of PPMs that look abhorrent, not the people whose locks are being forced to install them.

With millions of families stretched by rising bills, and debts to suppliers soaring, hundreds of thousands of customers have come under pressure.

By the middle of last year, almost one million electricity customers were in arrears with no plan to repay it, and about 860,000 gas customers - both figures the highest on record.

The average level of debt has been rising too, to more than £1,056 for electricity arrears and £797 for gas.

The energy industry says it has worked hard to help customers through the price shocks of the last 18 months but it still forcibly installed 94,000 PPMs last year, which looks more routine than a "last resort".

Ofgem's new Code of Conduct is a belated response to an issue that was unfolding under its nose, but took journalism to force it to act.

The requirement for installers to wear body cameras is a direct consequence of the footage gathered in a Times investigation that brought the aggressive tactics of installers to public attention.

Who is now exempt from PPMs?

Over-85s, the terminally ill or those reliant on powered medical devices will now be exempt from installation, but it's unclear how many of those 94,000 installations would have been avoided had the new code been in place.

For many other potentially vulnerable customers, including the over-75s, young families, and those with dementia, the risk of forced installation remains, though with companies required to carry out greater due diligence than previously.

Whether they are able to do it is an open question.

Companies have been banned from forcing PPMs on vulnerable customers since 2018 but that has not stopped it from happening.

Sky News has heard evidence from whistleblowers that companies are struggling to cope with the volume of customers in arrears.

Companies with millions of customers are inevitably bureaucratic and impersonal, and British Gas has already demonstrated that its network of subcontractors was not fit to make nuanced judgments about vulnerability.

Energy Secretary Grant Shapps was quick to condemn the energy industry over PPMs and welcomes the Ofgem code of conduct, but there is no sign the government will instruct the courts to stop issuing warrants to energy companies or act to change the law to remove suppliers' legal right of entry to homes.

At the heart of this issue is who pays when customers cannot or will not?

Suppliers argue that if they cannot recoup customer debts other bill payers will have to fill the gap. Ofgem has proposed a "social tariff" that would charge lower rates to some customers, but that too would need paying for.

Many of these questions will feel less urgent when and if energy prices fall, but not to the people whose doors are still being forced by the gas man.

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