As millions of families across the UK are hit by continually rising energy prices, low-income households are falling deeper into poverty; the average annual poverty premium is at £490, according to University of Bristol research.
Now, a new report from energy regulator Ofgem has found that too many of those vulnerable customers – customers who are struggling to pay their energy bills in the first place – are being forced to use gas and electric prepayment meters.
The report, published today, said that the number of gas meter devices installed using a court warrant rose by 6.9 per cent last year with the total number of both gas and electricity prepayment meters rising from 81,000 in 2016 to 84,000 last year. Warnings were given to British Gas, Ovo Energy and Utility Warehouse as they found the three companies had forcibly installed more meters per head for newly indebted customers than industry average, with Utility Warehouse around five times as many, British gas twice as many and Ovo Energy a third more.
Energy firms can forcibly install prepayment meters if customers fall into debt. But the regulator has warned struggling customers must first be put on a repayment plan, and installing a prepayment meter through a warrant should be “an absolute last resort” for energy firms.
While the number of homes being completely disconnected due to debt fell to an all time low of just 17 in 2017, Ofgem’s executive director Rob Salter-Church said energy companies “could do much more” and threatened “tough action” if forced installations continued to rise.
All three providers responded to the warnings, with British Gas noting it offered “lots of help and advice to customers to prevent them from reaching this stage” and that the forced installations were “a way of keeping a customer’s energy supply running when they are in debt”.
An Ovo Energy spokesperson said the provider has since changed its debt collection processes, with no meters forcibly installed between September 2017 and February this year. Utility Warehouse also said “We only ever install prepayment meters under warrant as a last resort”. November 2016 saw Ofgem cap the amount suppliers could charge for the installation of a prepaid meter to £150 and expect their use to decline.
Image: Flickr/Richard Gillin