Energy bills to rise next year for bad debts

[nowty]

Another energy related price increase coming next year, albeit a small one of an average of £16 or so per year. I've had a look through the OFGEM consultation document and the proposal is to allocate the costs to the unit rate of direct debit and credit meter customers. OFGEM is concerned suppliers bad debts could sink more suppliers.

Pre Payment customers will not pay any more as they cannot run up a supplier's bad debt.

https://www.bbc.co.uk/news/business-67725424

[Tinbum]

Pre Payment customers will not pay any more as they cannot run up a supplier's bad debt.

Should that not read;
Pre Payment customers will not pay any more as they cannot run up a supplier's bad debt any more.

[nowty]

Pre Payment customers will not pay any more as they cannot run up a supplier's bad debt.

Should that not read;
Pre Payment customers will not pay any more as they cannot run up a supplier's bad debt any more.

Yeah, I re-worded it 3 times and still could not get it right.

Its a bit ironic that some people ran up bad debt with their supplier, then were put on a pre payment meter and now they are protected from this latest price increase.

Also the current moratorium on fitting pre payment meters has led to the problem of bad debt for the suppliers being worse. This has led to the increased costs from April 24 being even higher.

[nowty]

A bit more info on it in the OFGEM consultation doc if anyone is interested.

https://www.ofgem.gov.uk/sites/default/ ... tation.pdf

[AE-NMidlands]

I can't decide from that article whether it is another poll-tax or not. It says

Last month, Ofgem announced it would raise the energy price cap, which limits the amount that companies can charge per unit of gas and electricity, from January.
It means the typical household will pay £1,928 a year for gas and electricity, up from the current £1,834 for a dual-fuel home.

which is clearly a consumption-based price rise, but

Under the proposals, households using prepayment meters would not be charged the extra sum, which works out at [exactly?] £1.33 per month.

which does sound like a rise in the daily charge (again.) I think it is iniquitous, charging those who are only just getting by the same amount as people heating mansions.

[nowty]

I can't decide from that article whether it is another poll-tax or not. It says

Last month, Ofgem announced it would raise the energy price cap, which limits the amount that companies can charge per unit of gas and electricity, from January.
It means the typical household will pay £1,928 a year for gas and electricity, up from the current £1,834 for a dual-fuel home.

which is clearly a consumption-based price rise, but

Under the proposals, households using prepayment meters would not be charged the extra sum, which works out at [exactly?] £1.33 per month.

which does sound like a rise in the daily charge (again.) I think it is iniquitous, charging those who are only just getting by the same amount as people heating mansions.

Debt related costs are currently set against both unit costs and standing charges although most are on unit rates. This additional amount is proposed to be against unit rate costs to be fairer to low users.

https://www.ofgem.gov.uk/sites/default/ ... tation.pdf
Page 72, section 6.65,

Allocating this allowance over the unit rate only (Option 2) would be possible
given that debt typically scales proportionally with consumption, and additional
debt (above existing allowances) will usually be related to consumption. Such an
approach may also be in customers’ interests, by avoiding a significant increase
in bills for low consumption individuals. Therefore, we are proposing to allocate
the allowance over the unit rate only.

[Moxi]

Only fair really, you cannot expect the industry that allowed all the debt to accrue and the badly regulated companies to walk away from it all, to actually take ownership for their mistakes, far better to squeeze the public a little harder.



Moxi

[AE-NMidlands]

Debt related costs are currently set against both unit costs and standing charges although most are on unit rates. This additional amount is proposed to be against unit rate costs to be fairer to low users.

https://www.ofgem.gov.uk/sites/default/ ... tation.pdf
Page 72, section 6.65,

Allocating this allowance over the unit rate only (Option 2) would be possible
given that debt typically scales proportionally with consumption, and additional
debt (above existing allowances) will usually be related to consumption. Such an
approach may also be in customers’ interests, by avoiding a significant increase
in bills for low consumption individuals. Therefore, we are proposing to allocate
the allowance over the unit rate only.

and yet today's Grauniad (https://www.theguardian.com/business/20 ... -bad-debts) still says

Ofgem said the one-off extra charge, which would be levied at £1.33 a month on bills paid between April next year and March 2025, was to “protect the market and consumers” after figures showed energy debt had hit a record £3bn.

Nothing about what the "average home" would pay there.

[Countrypaul]

Suely what theyare saying is that the average home (no prepaid meter) will pay an average of £1.33/month extra, that working out at an average of £16 over a year. Given that it will be paid via the cost of each unit, those with higher consumption will pay more and the payment in winter will be higher by virtue of consumption being higher in winter.

[AE-NMidlands]

Suely what theyare saying is that the average home (no prepaid meter) will pay an average of £1.33/month extra, that working out at an average of £16 over a year. Given that it will be paid via the cost of each unit, those with higher consumption will pay more and the payment in winter will be higher by virtue of consumption being higher in winter.

I can see that, but usually when an increase will be consumption-related they are careful to say the illustration is for the average home, a description which is conspicuously absent this time.
I wonder if it could be that - as it will most affect the heavy users/owners of big houses who are more likely to a) read the money pages of the newspapers and b) vote - they are misrepresenting it to try to avoid alerting that particular constituency?