Background
Ofgem committed to strengthening protections for Prepayment Meter (PPM) customers and those who are struggling with their bills as part of their Consumer Vulnerability Strategy 2025, which complements the Government’s wider work on affordability and fuel poverty.
In August 2019, Ofgem consulted on initial policy proposals to strengthen protection for consumers who self-disconnect, self-ration and struggle to pay their energy bills.
Ofgem are now consulting on their final proposals and the draft licence conditions to underpin those proposals, to be implemented by the end of 2020.
Ofgem Proposals
The final proposals from Ofgem will introduce:
- Requirements for Suppliers to take all reasonable steps to identify PPM customers who are self-disconnecting and offer appropriate support;
- Requirements on Suppliers to offer emergency and friendly-hours credit to all PPM customers and, where this is technically unfeasible, to offer alternative short-term support;
- Requirements on Suppliers to offer additional support credit to vulnerable consumers; and
- Updates to the Ability to Pay principles, including introducing a new principle, and incorporating the principles into the Electricity and Gas Supply Licence.
Supplier Changes
While some Suppliers will be comfortable with these requirements and will already have established processes in place to enable them, other Suppliers may require substantial change to their business.
Impacts that Suppliers will need to consider include:
- Policy: Determining company policy on provision of short-term and longer-term support to consumers, including emergency credit limits, hours of operation for friendly-hours credit, circumstances where additional support credit is not in the best interests of the consumer and the application of Ability to Pay principles.
- Process: Developing and implementing processes to identify self-disconnection for both traditional and smart PPM customers, including offering emergency and friendly-hours credit, providing additional support credit and providing alternative short-term or longer-term support.
- Systems: Ensuring internal and/or external systems can support required processes, such as configuring PPMs, and receiving and consuming relevant data to identify self-disconnection. This needs to be considered for both traditional PPMs (via the Prepayment Meter Infrastructure Provider) and smart PPMs (via the Smart Metering System Operator or the Data Communications Company (DCC)).
- Compliance and Assurance: Implementing relevant controls and quality monitoring to new processes to ensure compliance with new licence conditions and existing Standards of Conduct.
How Gemserv can help
Gemserv’s regulatory services consultants have extensive direct experience in delivering these requirements through implementing similar processes for Suppliers and through running the GB governance arrangements for Prepayment Services and Smart Metering.
For more information on the current proposals from Ofgem and how Gemserv can help you, please contact our team by emailing regulation@gemserv.com.
You can also find out more about our regulatory work and services by visiting the Regulatory page of our website.