Ofgem slammed for allowing forced PPM installs before publishing review

Ofgem has been criticised for allowing forced prepayment meters (PPM) installations to resume before it has published its review of the practice.

The regulator revealed on Monday (8 January) that Scottish Power, EDF and Octopus can now install PPMs with a warrant to recover customer debt, following a moratorium lasting almost a year.

However, Simon Francis, coordinator of the End Fuel Poverty Coalition, described the decision as “outrageous” and told Utility Week that it “would have made much more sense” for Ofgem to have waited for the results of the market compliance review (MCR) before giving the green light to forced installs.

“There’s no reason why Ofgem couldn’t have asked energy firms to extend the ban until this point [when the review is published] and until after this winter. Therefore is it that these three firms that have been pushing for this? The public will sense that they appear to be more concerned about protecting their profits and recovering debt than people’s safety this winter,” Francis said.

“It is outrageous that energy firms are seeking to use the courts to force people onto prepayment meters in the middle of winter. These meters have the potential to leave them without heating in the middle of winter.

“We still have grave concerns about the processes energy firms have in place for assessing vulnerabilities. Late last year, Scottish Power were found to be trying to seek warrants to force vulnerable households onto prepayment meters.

“Ultimately, without a change in the law, we knew this day would come. MPs and Ministers – who ignored pleas to introduce a full ban – can only hope that it is not their vulnerable constituents who are forced onto these meters.”

Last January, just weeks before the scandal at British Gas was revealed, Ofgem chief executive Jonathan Brearley said that the regulator was launching a review into self-disconnections, remote switching and forced installations as well as the “checks and balances companies have around any decision to put a customer on a prepayment meter”.

When asked by Utility Week whether the results of the MCR would also now be published, Ofgem said that its “priority is making sure the MCR is robust, and the evidence collected is reviewed in detail”. It added that it expects to publish the results “in the coming months”.

The regulator further stressed that those retailers which have been allowed to restart forced installs have addressed any major concerns that were highlighted during the MCR process.

One supplier which has been given the go-ahead to proceed with forced installations is Octopus Energy, but Utility Week understands that the company currently has no plans to restart involuntarily installing PPMs. Furthermore, Octopus has only carried out 32 such installations in its history.

Also responding to the news was charity Fuel Bank Foundation. It is calling on retailers to make regular checks on their PPM customers.

Matthew Cole, head of Fuel Bank Foundation, said: “We recognise suppliers are dealing with record levels of debt, which needs to be recovered, otherwise it’s paid by everyone, including vulnerable customers who are already struggling to pay very high energy bills.

“But, it is essential that suppliers comply with the new regulations and that Ofgem quickly and robustly takes enforcement action where they don’t.

“In addition, research shows that 43% of our clients have a critical need for energy. We are therefore calling for a new obligation on suppliers to regularly check in with their prepayment customers to make sure that prepayment is still a safe and practical option for them.”

Dhara Vyas, Energy UK’s deputy chief executive, added: “Ofgem giving the go-ahead for some suppliers to restart involuntary PPM installations follows a year-long voluntary pause during which time a new code of practice has been adopted and agreed between suppliers and the regulator.

“This has strengthened the safeguards for customers and detailed the process that suppliers must follow before any installation – including making repeated attempts to contact the customer first and carrying out a site visit to ensure these only take place where it safe to do so.

“Those suppliers restarting have also had to meet stringent conditions from Ofgem such as reviewing previous installations and addressing any resulting issues – while suppliers have also signed up to voluntary commitments to go further in helping households struggling with energy bill debt this winter.”

Vyas further warned about the impact on the level of debt owed to energy retailers, which currently stands at a record high of £3 billion.

She added: “While the new code of practice will address the concerns that led to the halt in installations, the new and extended exempt categories and the pause itself mean that customer debt will inevitably increase. It underlines the need for the government to put in place targeted support for those customers most in need to help make bills more affordable and stop the build-up of debt in the first place.”

Ofgem’s announcement follows the news last October that Scottish Power had successfully applied for PPM warrants, with courts running pilot schemes to test the application process.

Utility Week asked the supplier whether it would imminently begin executing its warrants and how many it had but the company declined to disclose the information.

A spokesperson added: “While we have met Ofgem’s strict criteria and been authorised to restart involuntary prepayment meter installations, where appropriate, this is always a last resort. Our focus will continue to be on supporting our customers to manage their debt and avoid the need for such action.”