Fair By Design respond to Ofgem’s consultation on changes to standing charges and other debt costs
Our response focuses on ensuring that households on low incomes do not incur a poverty premium based on the way they pay for their energy.
Background
In July 2023, the Government brought in temporary measures to end the premium that pre-payment meter (PPM) customers paid for their energy, whilst tasking Ofgem with finding a way of ending the PPM premium permanently when the Energy Price Guarantee comes to an end in April 2024. This consultation is part of that process.
Ofgem has taken the opportunity to look at the premium paid by customers who pay on receipt of bill (known as standard credit) as well as the premium paid by PPM customers.
Our response
We want to see the poverty premium in energy ended. In its consultation, Ofgem set out three options, and we support option three. Option three not only makes having a pre-payment meter the cheapest method of payment, but also significantly reduces the standard credit premium (option 3 would reduce the standard credit premium to £62).
We still believe a standard credit premium of £62 is too high but recognise that it is significantly better than both other options included in the consultation.
Our full consultation response notes in further detail our policy asks.
