Energy suppliers failing to offer consistent support for PPM customers

Energy retailers are failing to offer consistent levels of financial support for prepayment meter (PPM) customers, an industry expert has told Utility Week.

Abby Jitendra, Citizens Advice’s principal policy manager on energy, was speaking ahead of Ofgem setting the level of October’s price cap later this week.

In 2020 the regulator introduced new requirements for suppliers to offer additional support credit to customers in vulnerable circumstances who have self-disconnected or are self-rationing their energy usage.

Suppliers must consider a customers’ ability to repay this credit, which must be paid back at an affordable rate.

If a supplier deems that additional credit is not in the customer’s best interest, such as it may lead to unsustainable levels of debt, they are not required to provide this and alternative support should be provided instead.

In a report titled Market Meltdown, published by Citizens Advice towards the end of last year, Ofgem was heavily criticised for failing to enforce the rules surrounding the provision of additional credit.

Despite the findings of the report, Jitendra said Citizens Advice was still seeing many cases where people were not receiving the support from their supplier.

She said: “The licence states suppliers should offer it each and every time in the case of a vulnerable customer. But we’ve seen dozens of examples of people who would be classed as vulnerable under Ofgem’s guidance – people with very young children, with debilitating health conditions – who are being refused additional support credit because either they’ve received it too many times already, or because they haven’t been deemed vulnerable.

“That’s a good example of where there is a protection in place, the licence is clear. There’s obviously some flex in what is considered vulnerable, but we have some pretty good examples of where it wouldn’t make sense to refuse that person some money on the meter to keep them on supply. That’s emblematic of the problem.”

The latest industry forecasts predict that October’s price cap will exceed £3,550 equivalent per year, a figure that is expected to increase to more than £5,300 in April 2023.

Jitendra added that the situation is now more urgent considering how the energy crisis has deepened since the report was published.

She added: “Since the beginning of this crisis, we’ve been raising our concerns with Ofgem. With our Market Meltdown work we were just generally concerned about consumer protections being enforced and monitored.

“I think we’re taking a very similar tack with this, but if anything it’s even more urgent because of the affordability concerns. It’s particularly important that affordability protections are being monitored and enforced.”

In response, an Energy UK spokesperson said: “Suppliers are already seeing a big rise in the number of customers seeking help – something that will only increase when bills go up steeply later this year.

“Suppliers will continue to do all they can to support customers but with the demand for assistance at record levels, the government does need to further increase the help they provide to households to prevent more falling into difficulties.”

Utility Week contacted Ofgem for comment but received no response at the time of publication.

Supporting customers through this winter and identifying emerging vulnerabilities are among the key themes at the Utility Week Forum, which will take place in London on 8-9 November. Find out more here.