Three energy suppliers — npower, ScottishPower and Powergen — have promised to do more to avoid plunging customers into debt, after action by energy regulator Ofgem. People who pay for their energy using token prepayment meters are vulnerable to falling into debt following energy price rises. This can happen if there are delays in the supplier recalibrating the meter to register the new price.
Token meters are being phased out to be replaced by meters that can be recalibrated automatically, but in the meantime the task has to be done manually, which creates a risk of delays. Some 1.3 million customers are on token meters that use out-of-date technology, and Ofgem shares concerns about some customers' plight, which have been voiced by Citizens Advice, energywatch and MPs.
Practice and performance vary across the suppliers; but overall, the position for customers will be much improved following Ofgem's intervention. EDF Energy and Scottish and Southern Energy already have policies to not charge increased rates until the meter is recalibrated. Following Ofgem's approach, British Gas announced that from Dec. 1, 2006, it will write off any debt built up through delayed recalibration. npower, ScottishPower and Powergen differ in their approach and performance, but all have made important commitments to improve their response to customers while meters are replaced.
The suppliers' actions include:
Accelerating plans to replace token meters with “smarter” prepay meters and targeting replacement to customers who are most in need and have faced delays in getting meters recalibrated
Writing off debts that build up in cases of hardship
Being much more proactive in contacting customers to get access to meters to recalibrate them and offering help to those who may need it
Not barring customers who have a debt on their meter from switching away to new suppliers.
“It is patently unfair that token meter customers should fall into debt through no fault of their own,” said Ofgem Chief Executive Alistair Buchanan. “Ofgem has therefore demanded that npower, ScottishPower and Powergen follow the lead set by EDF, SSE and now British Gas to do more to prevent customers falling into arrears. “I welcome ScottishPower's existing recalibration program and its commitment to do more to help customers, and I am pleased that npower and Powergen are stepping up their efforts. We will watch developments closely, but customers themselves will be the ultimate judge of how well suppliers respond and should look to switch away if their supplier's service doesn't measure up.”