Utility Week

20 | FEBRUARY 2023 | UTILITY WEEK Energy Analysis Would ban on forced PPM installations help or hinder? Fuel poverty campaigners want to see forced installations of prepayment meters banned, but is this really the solution to help those struggling to pay for the energy they need? F or Shamima, being cut off from her electricity supply is more than just an inconvenience, it could be a matter of life or death. Living with a lung condition that requires her to use a breathing machine, she lives in constant fear of being unable to afford her energy bills. So when her supplier moved her on to a prepayment meter (PPM) she was le• ter- rified of running out of credit and losing access to vital medical equipment. Despite pleading her case to her supplier she remains on a PPM. This is just one of a number of real-life (but anonymised) stories in Citizens Advice's recent Kept in the Dark report, which set out the "urgent need for action" on PPMs. The personal stories of people in extremely vul- nerable situations self-disconnecting brings home the real-world impacts of the everyday decisions of energy suppliers. The charity has used these heartbreaking stories and the dramatic statistics around the number of forced installations of PPMs to build on its arguments for a moratorium on the practice. Yet this is far from a black and white situ- ation, and while fuel poverty campaigners have been quick to criticise the behaviour of energy suppliers, they have failed to come up with credible solutions to exactly how vulnerable customers who are defaulting on their energy bills should be handled. Suppli- ers do not want to push more customers into prepayment but what is the alternative? For Steve Crabb, chair of Energy UK's Vul- nerability Commitment – an alliance of 12 suppliers, serving 80% of British households – it is a true conundrum. He tells Utility Week: "It is very problem- atic and the difficulty comes in generalizing as opposed to looking at the circumstances in each case. "You have to have a solution, rather than just saying 'this is bad'. These are customers that can't afford to pay for their energy. If you don't want to put them on PPMs because of the risk of self disconnection – which is a concern I completely share – then what is the answer? If you leave them on credit when they can't pay their energy, that's just going to spiral into more debt and associated anxi- ety and mental health issues. No one wants that either." Crabb adds: "I would put it back to Ofgem and ask, should suppliers be required to do an evaluation of someone's risk of self-dis- connection? The key question is whether it is safe and practical to do that." For Dhara Vyas, deputy chief executive of Energy UK, there is frustration that the use of PPMs is so relentlessly presented as a negative. She points out that they have "long been a way of helping customers monitor and budget for their energy usage". She also cites the strict rules retailers have to follow and that, especially in the current climate, they are first exhausting all other options before installing a PPM by warrant. She says: "The energy industry is very aware of the challenges millions of house- holds are facing right now – which means difficult decisions around indebted custom- ers as suppliers are required to try and pre- vent them falling further into arrears. "Any increase in bad debt ultimately ends up costing all consumers more money, as it is recouped from bills. "Energy suppliers are discussing these concerns with the government and the regu- lator, including looking at options to reduce the price that prepayment customers pay." However, Citizens Advice's head of energy policy, Gillian Cooper, is adamant that ban- ning forced installations of PPMs is "the best way to protect people from being cut off from their gas and electricity until new protec- tions can be introduced". She adds: "People will still be able to choose to have a prepayment meter installed if it's the best way for them to manage their money. "Ofgem should then work with energy suppliers to make sure people are getting the support they need with debt." Citizens Advice's report, published in Jan- uary, calls for a review of PPMs, with a com- mitment to replace them with a credit meter "where necessary".

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