Jonathan Brearley, CEO of Ofgem, said energy suppliers won’t be allowed to restart the controversial practice of forced prepayment meter installations until they can show they’re adhering to the rules.

Speaking at the Commons’ Business, Energy and Industrial Strategy (BEIS) Committee, Brearley said: “Our priority is in making sure that this industry gets its act in order. Therefore, they will not be restarting forced installation of prepayment meters at the end of March, and only, when and if, they can establish they’re acting in accordance with that new code of practice.

“So, we are deeply concerned about this. We have investigations and compliance reviews ongoing but our message to Chris [Chris O’Shea, CEO of Centrica, the parent company of British Gas] and to all the industry is that you need to fix things now, you don’t need to wait for our reviews to conclude.”

Ofgem confirmed it is extending the suspension of forced PPM indefinitely. It won’t be lifted until all the energy suppliers sign up and put in place a new (legally enforceable) code of practice, and guarantee to comply with the rules in full.

It added it expects the new code to be published in early April – but this is still to be confirmed.

Last month, Ofgem confirmed suppliers had agreed to halt forced PPM installations for six weeks – up until 31 March 2023 – after it wrote to them asking them to pause this practice.

Suppliers agreed to stop installation by warrant, remote mode switches via smart meters without the explicit agreement from the customer, and ceasing new applications to court for installation warrants, unless theft is suspected.

It came after an investigation by The Times alleged that a third party agent used by British Gas forcibly broke into the homes of vulnerable customers to install prepayment meters.

Ofgem called the allegations ‘extremely serious’ and enforced a temporary ban, adding it would launch an urgent investigation into British Gas as well as a market-wide review of the rapid increase in the installation of prepayment meters.

‘Right decision to end heavy-handed practice over coming weeks’

Gillian Cooper, head of energy policy at Citizens Advice, said: “Ofgem’s decision to extend the temporary ban on forced installations beyond 1 April is the right one, sparing many from a stressful and often invasive practice in the coming weeks. It will allow major reviews to conclude which must end, for good, the heavy-handed practices and unsafe switches which have become all too familiar.

“We know many people have already been forced onto a prepayment meter despite clear evidence this wasn’t safe for them. Suppliers must now commit to checking if any customers need to be moved off a prepayment meter and provide compensation where mistakes have been made.”

Prepayment meter compensation and costs

Since then, Ofgem has urged suppliers to check whether prepayment meters were installed correctly under its rules, and to offer compensation if they were fitted inappropriately.

Meanwhile, charities have called for a PPM installation ‘amnesty’ in the wake of the allegations and subsequent investigation by Ofgem.

And just this week, the Government said firms will be banned from charging households with PPM energy meters more than those paying by direct debit in a Budget announcement due to confirm this today.

Chancellor Jeremy Hunt said the extra costs for PPM energy customers will be scrapped from July, saving more than four million households about £45 a year on their energy bills.