Utility Week

8 | MARCH 2023 | UTILITY WEEK Energy Comment T urning energy retailers into the pantomime villains of the cost of living crisis has been a common trope of politicians, regulators and the media over the past year. It is a practice Utility Week has always argued is unfair and unhelpful. But if you were to dream up a bad guy for these grim times you would be hard pressed to beat the apparent reality of a man called Alfonso. The Times' jaw-dropping undercover investigation into the practices employed by debt collection agency Arvato Financial Solutions, operating on behalf of Brit- ish Gas, was littered with references to this particular operative. The comments attributed to him show the very worst of humanity: callous. Materialistic. Border- line sadistic. His alleged comment that "You'll have to literally, like, murder someone in this job to get in trouble" will haunt the retail sector for years to come. To be clear, Alfonso is not an employee of British Gas (or any other retailer) but Chris O'Shea, the company's chief executive professed himself "accountable" for this situation. And like it or not, the energy retail sector as a whole will be tainted by these appalling accusations. One worrying detail was the incentive apparently oˆ ered to Arvato employees for force-‰ tting a prepay- ment meter (PPM). One industry insider tells Util- ity Week this arrangement was not exclusive to Arvato and that the sector is still dogged by bad practices of the past. They point to the door-to- door selling scandals of a decade ago, adding: "It feels very much like – here we go again. Is this just the tip of the iceberg?" They added: "You've got to wait for a generation of direc- tors to retire before that culture is completely eradicated." There is no doubt that the dramatic allegations in The Times investigation of PPM meters being forced on the most vulnerable of households, in one case with no way to top up beyond the £10 credit installed, have sent a chill wind through the industry. For weeks the debate over a moratorium on forced PPM installations had been waging, with many suppli- ers and industry ‰ gures making the case that this is a nuanced debate and a ban in isolation would be a blunt tool. That argument now seems to be dead. As Utility Week goes to press, Ofgem has just con‰ rmed that the ban – which was self-imposed by most suppliers before the regulator issued its proclamation – would continue until 31 March. It also covers the remote switching if smart meters to prepay mode. Still, the ban remains a short-term solution and Ofgem's chief executive Jonathan Brearley has accepted that it is far from perfect. In a letter to suppliers on 15 February, he wrote of a "di– cult balance" as unrecover- able debt may then be added to the bills of paying cus- tomers, "many of whom are themselves struggling with paying their bills given the wider aˆ ordability issue". While PPMs are the latest battleground for the repu- tation of energy retailers, bad debt could end up being the most pressing challenge for the industry in 2023. This is not discussed widely enough and brushing it under the carpet is a foolish response. The issue of the cost to serve PPM customers is similarly ill-debated, but to solve the underlying issues of today's scandal we need to address the unintended consequences of past decisions. The real danger now is that the public percep- tion of energy retailers will be so low that they will be frozen out from the debate. In the meantime, the chances of the government moving from its default position of demonising the industry to focusing on genuine reform of the market for the bene‰ t of all seem much further away. There would never have been a good day for the actions described by The Times to come to light. But the Making suppliers the badguys benefi ts no one Explosive allegations made against contractors working for British Gas about their treatment of prepayment meter (PPM) customers have rocked the energy retail sector over the past month. James Wallin looks at how the story unfolded and assesses the impact. ment meter (PPM). One industry insider tells ity Week this arrangement was not exclusive to ity Week this arrangement was not exclusive to ity Week Arvato and that the sector is still dogged by bad practices of the past. They point to the door-to- door selling scandals of a decade ago, adding: "It feels very much like – here we go again. Is this just the tip of the iceberg?" They added: "You've got to wait for a generation of direc- tors to retire before that culture is completely eradicated."

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