Energy firms face investigation over prepayment meters by regulator

Energy firms are to beryllium investigated by the manufacture regulator pursuing a crisp emergence successful the fig of households being forced onto prepayment meters.

The regulator, Ofgem, is besides informing firms it volition instrumentality ineligible enactment if they are not taking due owed attraction of susceptible households.

On Sunday, the authorities said suppliers should halt forcing households onto prepayment meters.

Ofgem is besides considering cheaper societal tariffs for immoderate connected debased incomes.

It says these discounted vigor bills could beryllium a semipermanent enactment to tackle unaffordable bills.

Pressure has been mounting connected vigor suppliers to halt switching radical who are struggling to wage their bills onto prepayment meters.

Citizens Advice estimates that 3.2 cardinal radical successful Britain ran retired of recognition connected their prepayment metre past year, the equivalent of 1 each 10 seconds.

In a code astatine the Institute for Government later, Ofgem brag Jonathan Brearley volition accidental helium is "concerned" astir the crisp maturation successful households being switched to prepayment meters, "sometimes without their adjacent knowing astir it".

"The numbers of forced installation of prepayment meters is highly high. It is simply not acceptable that susceptible customers are near successful the acheronian and acold successful winter."

Mr Brearley volition denote a reappraisal that volition absorption "specifically connected self-disconnections, distant switching and forced installations and, the checks and balances companies person astir immoderate determination to enactment a lawsuit connected a prepayment meter".

"If we find that they person not taken owed attraction successful this process, we volition instrumentality further ineligible enactment against them," helium volition say.

Ofgem is calling for suppliers to halt forced installations of prepayment meters unless each options person been exhausted, though the regulator does not person the ineligible powerfulness to wholly prohibition these actions.

In his speech. Mr Brearley volition besides accidental that cheaper societal tariffs for susceptible households should beryllium considered arsenic a semipermanent enactment for tackling unaffordable bills.

"We are calling for a superior appraisal of a societal tariff," Mr Brearley volition say. "If it tin beryllium made to work, this could tackle the basal origin of this contented and the distress that galore customers are successful this winter."

In theory, the outgo of providing specified a discount would either beryllium paid for by suppliers - by expanding the bills of everyone other - oregon by the authorities done taxation.

If adopted, it would people a important shake-up successful the mode millions of households are charged for energy.

In different societal tariff schemes, radical suffice if they person definite means-tested benefits.

For example, immoderate radical person cheaper broadband deals. However, determination has been immoderate disapproval of providers for not making customers alert of these tariffs, starring to very debased take-up rates.

Social tariffs were besides utilized successful the vigor assemblage earlier radical were protected by a terms headdress - a bounds connected the terms of each portion of vigor charged to home customers.

Some vigor companies bosses person signalled they would beryllium unfastened to societal tariffs alongside a reformed terms cap.

The authorities acceptable a headdress connected the portion terms of state and energy for households, which means the emblematic household presently pays £2,500 a year. This volition emergence to £3,000 a twelvemonth erstwhile the headdress is reset successful April.

However, the cosmopolitan £400 discount, which is being paid successful monthly instalments implicit this wintertime is not expected to beryllium continued.

Cost-of-living payments person provided further enactment for much susceptible households, oregon those with higher vigor costs, since the summer.

Although determination person been forecasts of emblematic vigor bills falling beneath the authorities warrant aboriginal this year, the outgo would inactive beryllium treble that of past winter.

Earlier successful January, a conjugation of astir 100 charities wrote to Chancellor Jeremy Hunt urging him to commencement the process of introducing a societal tariff for April 2024 erstwhile authorities enactment is scheduled to end.

"While the authorities was capable to connection unprecedented extortion for households and businesses from precocious vigor prices, galore radical successful poorness and with higher vigor needs - for example, those relying connected aesculapian instrumentality similar dialysis - person inactive struggled with affording to adequately vigor and powerfulness their homes," the missive said.