British energy suppliers criticized for ‘back door disconnection’ | energy industry

Ofgem has asked Britain’s energy suppliers to clean up their act after receiving alarming reports of cash-strapped families being left without power for days or even weeks after being pushed to a prepaid meter.

A recent analysis by price comparison site Uswitch shows that the number of people on the prepaid meter is rising for the first time since 2019 as thousands of Britons switch every month as they struggle to pay higher energy bills.

Charities have warned that the practice risks “disconnecting through the back door” when families cannot afford to charge their meter. Citizens Advice recently said that more people were unable to increase their prepaid meter in the first nine months of this year than in the entire previous three years.

By monitoring suppliers and working with stakeholders, Ofgem said it recognized “potential deficiencies in how some suppliers deal with vulnerable smart meter consumers, including some customers who are being diverted to prepaid meters without full consideration of the customer situation.”

“In extreme cases, reports we have received indicate that this has left some vulnerable customers without power for days or even weeks,” an Ofgem spokesperson said. “This is completely unacceptable, especially as we head into a very difficult winter.”

Ofgem’s director of retail, Neil Lawrence, has written to suppliers telling them to “urgently” investigate the matter. The letter reminded them of their obligations to customers and that they should have effective checks and balances when switching smart meter mode. The regulator will not hesitate to “take action in the back of this business where failures are found”.

The signs of a growing consumer crisis come on the heels of Chancellor Jeremy Hunt’s recent decision to renege on former Prime Minister Liz Truss’s pledge to freeze energy bill increases, cutting subsidies from two years to six months.

The scheme offers a £2,500 cap on the annual price of a typical dual-fuel bill until the end of April. After this point, only the most vulnerable will be subsidized, with forecasters expecting the typical household to face energy costs of more than £4,300 a year.

There were 7.38 million homes using prepaid meters in the first quarter, up from 7.35 million in the last three months of last year, according to a Uswitch report that looked at Ofgem data. Based on current trends, it expects 10,000m to be converted to prepaid each month.

What annoys activists is the danger of “self-dissociation” between people. “Pushing people who owe power to prepaid meters is a back-door separation,” said Gillian Cooper, head of energy policy at Citizens Advice. “If people are not able to refill, they are in real danger of the heating and lights going out.”

Ofgem said it has been looking more broadly at how suppliers can support vulnerable customers in general, such as those with disabilities. This work involved how people are treated when they are transferred to prepaid counters and the results of this work will be published soon, with ratings given to each resource.

“We expect improvement plans to be implemented quickly and will not hesitate to take punitive action when needed. Service standards across the industry need to be improved,” Ofgem added.