Forced installations of prepay energy meters for those in debt with their supplier could be banned for the most vulnerable customers, Ofgem has proposed.
And where such installations are allowed to happen, the resulting 'warrant charges' shouldered by customers would be capped or even banned under the regulator's plans.
As things stand, when households fall behind on their energy bills and are unable to reach a repayment agreement with their supplier, the supplier can get a court order allowing them to forcibly enter the home and install a prepayment meter – known as an 'installation under warrant'.
Those households could then face a raft of charges including the supplier's court costs, locksmith fees and even dog-handling fees if their pet was home alone at the time the supplier gained entry. Costs range from £200 to £900, but are typically around £400.
Some 86,000 prepayment meters were forcibly installed in UK homes in 2015, and around 38% of the costs incurred by suppliers were charged back to already-indebted customers.
Ofgem has been investigating the issue for the past year and is proposing the changes because it believes those in vulnerable situations "should not face costs that result from their vulnerability or exacerbate it".
Energy typically costs more for customers with prepayment meters than those with traditional credit meters – though prepay tariffs will be capped from next April.
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What changes are planned?
Ofgem has published a series of proposals and is now inviting comments and responses to its plans before it finalises them in November. Here are the main points:
- Warrant charges would be capped for all customers – The cap would be set at either £100 or £150 (Ofgem's currently consulting on what level to set it at).
- Warrant charges would be banned altogether for vulnerable customers – This includes people with mental or physical health issues.
- Installations under warrant would be banned for extremely vulnerable customers – This would apply to those who have suffered extreme traumas, such as domestic violence.
If you want to contribute to Ofgem's consultation, you must email it by Wednesday 9 November.
What does the energy industry say?
Lawrence Slade, chief executive of trade body Energy UK, says: "A prepayment meter is only ever installed under a warrant as a last resort.
"Energy providers always take a customer's ability to pay into account when setting up a repayment plan for energy debt. It is important for customers to discuss their circumstances directly with their supplier, so an appropriate payment plan can be put in place.
"Suppliers will make numerous attempts to contact customers in debt, by various means and at different times of the day, based on the information they hold for the customer.
"The industry takes its obligations in this area very seriously and supports proportionate measures that improve outcomes for vulnerable consumers."
What does Citizens Advice say?
The charity's chief executive Gillian Guy says: "Warrant charges can make it harder for people struggling with gas and electricity debts.
"Not only do they have to face the extra costs of having a meter installed – which can be hundreds of pounds – prepayment meters are often more expensive than standard tariffs. This means people struggling with energy debt are then faced with higher gas and electricity bills.
"Capping the warrant charges and ending them altogether for vulnerable customers will help to stop people being pushed further into debt when they are already struggling to manage their costs."