Feb 2, 2023
British Gas Faces Probe Amid Forced Prepayment Plan Backlash
(Bloomberg) -- The UK’s energy watchdog Ofgem will investigate allegations that Centrica Plc’s British Gas forced the installation of pre-payment meters on customers struggling to pay their bills.
The parent of the UK’s biggest household energy supplier announced that it would suspend the practice “at least until the end of the winter” and that protecting vulnerable people is its absolute priority. The decision followed an article by the Times that said a firm used by British Gas to pursue bad debts had broken into homes to fit meters when there were signs that children and people with disabilities lived in the property.
Rising energy bills and a severe cost-of-living crisis in Britain has forced millions of households into fuel poverty this winter. Centrica has benefited from higher prices in the wholesale market in the past year and is likely to face the political spotlight when it reports a near-eightfold boost to earnings for 2022 later this month.
Read more: Millions of Britons Unable to Afford Energy May Unplug From Grid
“It is unacceptable for any supplier to impose forced installations on vulnerable customers struggling to pay their bills before all other options have been exhausted,” a spokesperson for Ofgem said Thursday.
Later, Electricite de France, or EDF, said that it is also suspending forced installation. The company said it moves customers to prepayment without their consent in the UK only as “a very last resort.”
EDF regularly “reviews and updates its processes and so we are confident they are fit for purpose. Nonetheless we are currently reviewing them again to reconfirm they are robust and see if we can make any improvements. We have suspended forced installation of prepayment meters while we conduct this latest review.”
Overall, about 4.5 million households nationwide use prepayment meters, designed to help users avoid racking up bills they can’t afford. The meters require people to pay for energy in advance — at the post office or a shop, for example. Once that credit runs out, lights go off and heaters shut down.
The campaign group End Fuel Poverty Coalition called on Thursday for the government to ban the forced installation of pre-payment meters as too many customers are struggling. The practice by utilities “is a system that stinks,” Labour’s shadow climate minister Ed Miliband told BBC 4 radio. It’s “in desperate need of reform.”
Last month, the UK’s energy watchdog said the government should consider imposing a social tariff to fund programs that support vulnerable households.
“It requires the industry regulator and the government to work together, this is not something British Gas can solve on its own,” Centrica Chief Executive Officer Chris O’Shea told BBC Radio 4.
(Updates with EDF statement in fifth, sixth paragraphs.)
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