According to the latest available estimates from Energy Regulator Ofgem, there were around 4.1 million electricity and 3.3 million gas customers on a prepayment meter (PPM) in Great Britain in 2020, with proportionately more households in Wales using PPMs compared to England.
Wales has the highest proportion of gas PPMs compared to other Great Britain Nations, and they are often used by some of the most vulnerable in society, on low incomes and/or already in debt to their supplier.
Anglesey has the highest level of prepayment meters in Wales, at almost 29 per cent, followed by Gwynedd at almost 22 per cent.
Despite a concerted effort from Ofgem in 2020 – including introducing new supplier licence conditions for identifying vulnerability, offering emergency and ‘friendly hours’ credit, and considering ability to pay when setting up debt repayment plans - the global energy price crisis has exacerbated the severity of the situation, with the numbers of PPMs in operation across the UK now rising.
In January, before The Times investigation revealed British Gas was routinely sending debt collectors to break into customers' homes and force-fit prepayment meters, even when they're known to have extreme vulnerabilities, the then UK Business Secretary wrote to Energy Suppliers stating that they should stop forcing vulnerable customers on to prepayment meters and that they should make greater efforts to help those struggling to pay their bills.
“He called for the ‘urgent publication’ of the energy suppliers' recent investigation into vulnerable customers, and the release of data on applications suppliers had made to forcibly install meters.
In February, Ofgem asked Energy companies to suspend the forced installation of prepayment meters, and Lord Justice Edis ordered Magistrates' Courts in England and Wales to stop authorising warrants for Energy Firms to forcibly install prepayment meters with immediate effect.
On the same day, then UK Energy Minister, met the boss of Ofgem and told him that the UK Government expected ‘strong and immediate action where suppliers fall short of their obligations’.
Ofgem’s temporarily suspended forced installations of PPMs includes:
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- ceasing of installation by warrant;
- ceasing of remote mode switching of smart meters to prepayment without explicit agreement of customer; and
- ceasing new applications to court for installation warrants – unless theft is suspected.
During last week’s UK Government Budget the Chancellor announced that from the 1st July prepayment energy charges will be brought in line with customers who pay by direct debit “on a permanent basis”.
Climate Cymru has expressed concern that this does not affect the Standing Charges, which is where the majority of the PPM uplift happens.
In this context, the UK Government has asked Ofgem to report back on options for ending the higher standing charges paid for by prepayment meter users.
At the UK Parliament’s BEIS Select Committee on 14th March, Ofgem confirmed all suppliers are now extending the suspension of forced prepayment installations beyond 1 April, which won’t be lifted until Ofgem establishes suppliers are acting in accordance with a new code of practice.
National Energy Action, NEA believes there is also an immediate need to
- ensure enforcement action is strong – including reversing wrongful installs and compensating households affected;
- strengthen protections/ licence conditions;
- AND, for a root and branch review of prepay:
- reducing the number of traditional prepayment meters in use;
- And addressing debt.
NEA believes the delivery of energy efficiency measures should be promoted and delivered alongside independent direct advice and assistance to vulnerable households in, or at risk of, fuel poverty on improving home energy efficiency, maximising incomes, and managing/reducing energy costs, and accessing the broader support available in the energy market.
It has been a year since the Welsh Government consulted on the next iteration of its Warm Homes Programme (WHP) and we urgently need to accelerate the improvement of energy efficiency in fuel poor homes.
NEA and the Fuel Poverty Coalition Cymru would like to see the Welsh Government:
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- setting out a timeline for the next demand-led scheme to be operational before winter;
- focusing on the ‘worst-first’ – i.e. those on the lowest incomes, living in the least efficient homes
- and taking an appropriate, multiple-measure, ‘fabric first’ approach.
A constituent emailed me stating “Prepayment meters were, intended to prevent people from getting into arrears.
The problem here is that the utility companies charge a higher rate to those people using prepayment metres and that needs to change”.
Punishing someone for paying in advance and punishing someone for being on a low income cannot be justified.
We will be pleased to support this motion accordingly.