Regulator plans to cap prepay meter installation costs
Ofgem wants to limit the charges for installing prepayment meters (PPMs) to a maximum of £150.
When a customer falls into debt, their energy supplier can install a PPM under warrant, meaning they apply to court to fit the meter at the property.
There are eight million customers on a PPM in the UK.
PPM charges, including court costs, can range from £200 to £900 and they are often passed onto indebted customers.
While Ofgem acknowledges that some suppliers waive these fees, in 2015, customers faced an average bill of £400 for having the PPM installed under warrant – potentially pushing them further into debt.
As a result, the regulator has set out proposals to limit charges to £100 or £150.
For the most vulnerable customers, such as those in financial hardship, with physical and mental health issues or learning difficulties, it also plans to entirely prohibit PPM warrant charges.
Rachel Fletcher, Ofgem’s senior partner for consumers and competition, said: “It’s deeply unfair that struggling customers get hit with high warrant costs when they’re already grappling with debt, doubly penalising them.
“Ofgem’s role is to protect every consumer, including the most vulnerable. Suppliers need to help customers manage their debts.
“Suppliers need to ensure that PPMs are only installed under warrant as an absolute last resort. Where they are needed, our proposals will protect customers by limiting PPM warrant charges for all customers and removing them for the most vulnerable.”
Just last month, Ofgem announced it would push ahead with plans to introduce an interim price cap for pre-pay meter customers, helping them save around £75 a year.