Pre-payment Meters
Debate between Chris Stephens and Andrea Leadsom
Chris Stephens
I want to come back to the issue of self-disconnection. Have there been any discussions with her Department and the Department for Work and Pensions about emergency help that can be given to someone in those circumstances?
Andrea Leadsom
Those conversations happen regularly. I will write to the hon. Gentleman with any specific changes that we intend to make or consult on. I absolutely assure him that suppliers are required to take into account consumers’ specific circumstances. Ofgem is looking into the cost of having pre-payment meters removed and whether that should continue for pre-payment consumers.
I move on briefly to the investigation into the retail energy market currently being conducted by the Competition and Markets Authority. The CMA published its provisional findings and remedies in the summer. It found that customers on standard variable tariffs are being charged unjustifiably high prices; the majority of pre-payment customers, of course, are on those standard variable tariffs. We are committed to acting on the CMA’s recommendations and to ensuring fair prices for all consumers, including standard variable tariff customers using pre-payment meters.
The CMA also found that pre-payment customers have fewer tariffs to choose from than customers paying by direct debit. There are indications, though, that that is beginning to change. We are starting to see the development of smart pre-pay meters. E.ON is currently piloting a smart pay-as-you-go tariff for consumers using a smart pre-payment meter who then pay the same prices as the company’s standard credit customers. It expects to make the tariff more widely available to new and existing customers from next year.
With OVO’s pay-as-you-go tariff, pre-payment meter consumers receive an in-home display that enables them to see how much energy they are using and when, and how much credit they have left. Consumers can also add credit to their pre-payment meter anywhere via app, text or online. We are also seeing examples of good practice by suppliers. For example, there is SSE’s support for its vulnerable pre-payment consumers that includes monitoring those on the priority services register to identify self-disconnection. The company will then call the consumer to check the situation and to make the offer of extra assistance, where appropriate.
The Government have a manifesto commitment to
“ensure that every home and business in the country has a Smart Meter by 2020, delivered as cost effectively as possible”.
The roll-out of smart meters is an important national modernisation programme that will bring major benefits to consumers and the nation as a whole. Domestic customers will be offered an in-home display enabling them to see what energy they are using and how much it is costing.
Smart meters have the potential to transform the experience of being a pre-payment customer. Customers can top up more conveniently through a range of channels. Topping up smart meters in pre-pay mode should become as easy as topping up a mobile phone. They are likely to herald greater and cheaper tariff choices for these customers, as the cost differential will be reduced. Smart meters will enable energy suppliers remotely to take action to avoid disconnection—for example, through switching consumers to credit mode, setting non-disablement periods, and configuring debt recovery amounts to be small.
A customer’s ability to pay their energy costs while keeping warm is among the top concerns of my Department, and we are fully committed to tackling these issues through a range of innovative policies. I thank the hon. Lady and the other hon. Members who contributed to this very important debate.
Question put and agreed to.