O’Shea defends Centrica’s forced PPM procedures

Centrica boss Chris O’Shea has defended his company’s procedures to identify vulnerable consumers, claiming they are “more stringent” than those of the energy regulator’s.

O’Shea was speaking before MPs at a joint session of the Business, Energy and Industrial Strategy (BEIS) and Justice committees on Tuesday (14 March) where he was grilled about Centrica’s practices in relation to forced PPM installations.

All suppliers have stopped seeking court applications to forcefully install the pay as you go meters in the homes of indebted customers, following the major undercover investigation by The Times which alleged Centrica was flouting Ofgem rules.

During the hearing O’Shea said his company was granted 92,500 warrants in 2022, with 20,469 devices actually being forcefully installed. On average, he said, the supplier makes 24 attempts to contact a customer before applying for a warrant.

BEIS committee chair Darren Jones grilled O’Shea on reports that although agents working for Arvato Financial Solutions, on behalf of British Gas, had Excel spreadsheets listing the vulnerabilities of customers, they were still given the go ahead to enter their homes under warrant by the supplier’s head of customer debt collection.

In response, the Centrica chief said: “We will issue, sometimes, to the debt collection agency a ‘proceed with caution’ notice where we suspect there may be a vulnerability but we’re not sure.”

He added: “I would also say that the Ofgem definition of vulnerability applies to the customer. We apply that definition to the household. So we have a procedure, a policy, which is more stringent than the Ofgem definition. But if we suspect there’s a vulnerability, we’ll let the debt collector know, but we can’t confirm that if we can’t make contact with the customer.”

He was further asked about who should pay for consumers who simply cannot afford to pay their energy bills.

In response O’Shea said: “Now we could say that energy companies could absorb it. I believe that Centrica/ British Gas is the only energy retailer in the UK that’s making a profit. Most other companies are making a loss, half the market has gone bust in the past year, 18 months. So there is a market where there is very little profit in energy retail to subsidise those that can’t pay.

“I think that the way that we should pay for this, a progressive way, is to pay for it through general taxation,” he added.

Also speaking during the hearing was Utilita chief executive Bill Bullen who gave his thoughts on the issue and agreed energy suppliers are not making profits. He further referenced a figure by Energy UK which suggests the average profit being made in the retail sector is -2%.

He added: “Somehow if vulnerable customers can’t afford to pay, that cost clearly does have to be socialised because licenced energy companies do not have that money and it would have to come either from other energy consumers or from taxpayers, pretty much the same group of people.

“One way or another, it has to come from somewhere because energy companies… don’t have this money.”