The regulator has given industry players including suppliers & consumer protection bodies until 11 June to comment on its proposals to re-introduce so-called ‘acquisition-only tariffs’.

The consultation follows Ofgem’s  recent measures taken to protect consumers – including via a series of rising or falling caps guiding retail tariffs – from rampaging inflation in energy prices. These have been caused by the world’s emergence from Covid lockdowns, and by the neo-fascist Putin’s rapacious aggression since 2022 towards Ukraine.

So-called ‘acquisition-only’ tariffs, available only to new accounts and not to existing customers, have been banned by Ofgem since April 2022, in an effort to stabilise prices in unstable, post-Covid markets. The ban was first extended until March last year, and then until March 2024.

At the end of February, Ofgem announced it would use its existing powers to extend the ban for a further thirteen months, hinting the latest extension would be the last. At the same time, the regulator said it would sound out industry opinion on whether to remove the ban as early as this October, assuming its retail price caps remain in force.  The alternative is to leave the ban in place until March next year.

Permitting suppliers to re-launch aggressive customer-recruiting tariffs this autumn, is flagged in the consultation as Ofgem’s preference.  An early lift will yield, the body expects will a faster return to competition between suppliers on both price and service factors,

The proposals set out Ofgem’s evaluations of each scenario’s impact on efficient competition in retail energy.

Early response from participants included an argument for retention from Citizens’ Advice, the government’s statutory and independent advisor on fuel poverty.

“Keeping the ban in place is a no-brainer“, Gillian Cooper, CA’s energy director commented.  “It prevents suppliers from locking loyal customers out of their cheapest deals.

“Ofgem must resist pressure to scrap it and ensure suppliers are proactively keeping customers up to date about their cheapest deals.

Removing the ban would unfairly hit older and disabled consumers the hardest, said the CA spokesperson, as they are less likely to switch to a new supplier.

“The ban also protects millions of people with energy debt, whose suppliers can block them from switching, as it means they don’t have to stay on the most expensive tariffs pushing them even further into the red.

At Britain’s biggest supplier Octopus Energy, director of regulation Rachel Fletcher agreed.

 “Allowing suppliers to block their best deals from loyal customers would be a return to the ‘Wild West’ of the energy industry”, she said.

“The loyalty penalty was a key reason 30 energy companies went bust, and ended up adding billions of pounds on to energy bills. Ofgem was right to ban these unsustainable Del Boy tactics, and it would be crazy to bring them back now”, Fletcher went on.

“Instead we need a more transparent, fairer market where suppliers are forced to compete based on innovation, customer service and efficiency. We need lower prices for everyone, not just the few.”

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The charity’s analysis reveals that last year, 1.7 million people disconnected at least once a month. And 800,000 people went more than 24 hours without gas and electricity, unable to make a hot meal or take a warm shower, because they couldn’t afford to top up.

Now Citizens Advice predicts the crisis is set to get even worse in the coldest months of this year,  just as suppliers have been allowed to restart forcible installations of prepayment meters.

The charity says it expects this to be its busiest winter ever for helping people who can’t afford to top up their prepayment meter. Its new research shows more than five million people live in households that are in debt to their energy supplier, putting them at risk of debt collection, including being forced on to a meter they can’t afford to keep topped up.

After helping record numbers for energy debt in 2023, Citizens Advice warns that existing energy bill support is simply not going far enough. It says a long-term plan to tackle spiralling energy debt is now essential.

With the removal of government support schemes, average energy costs are as high as last winter for many households. The typical monthly energy bill is expected to come down by at least £20 in April but will still remain at worrying levels.

The charity, the government’s statutory advisor on fuel poverty, calculates that energy debt has hit a record £2.9bn as households struggle to make ends meet and pay their essential bills. Citizen Advice’s new research suggests one in four people can’t afford their essential bills and one in ten households have had to borrow money in the past six months to cover their energy bills.

The energy price crisis is impacting households in other ways too. Half (49%) of those in debt to their energy supplier have turned off the heating in their homes as a result of being in energy debt.

Almost three million people live in households, the charity claims, where they have skipped meals, cut back on food spending or sold or pawned possessions in the last year to save money to keep their meter topped up.

To prevent even more families falling into debt, Citizens Advice wants to see urgent reform of the Warm Home Discount.  It says this has failed to keep pace with rising prices, and should be increased and made available to a wider range of households.

The charity also wants the government to work with Ofgem to develop a joint action plan to deal with energy debt. This should include increased funding for energy debt support to help meet spiralling demand.

Citizens Advice has found that half of prepay users with children under four had disconnected in the past year because they couldn’t afford to top up, compared to a quarter (23%) of people with no children. Living in a cold home can have significant negative impacts on their health and development.

New rules on force-fitting only provide absolute protection for households with children under two. As this practice restarts, Ofgem should monitor the impact of groups who missed out on absolute protection from this practice and expand the rules if there is evidence of significant harm.

The charity’s chief executive Dame Clare Moriarty said: “Our frontline advisers are helping more people than ever who can’t pay their energy bill. Record numbers are in debt to their supplier and millions with a prepayment meter are too often going without heating and hot meals because they can’t afford to top up.

“The government has not provided new energy bill support for those in need and has run out of time to develop the long-term approach it promised by April 2024. Without immediate action, we risk re-running this same crisis every winter.”

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Ofgem director Jonathan Brearley attributed the 5% rise – equivalent to £95 over a year – to continuing fluctuations on electricity wholesale markets, resulting almost entirely from Russian dictator Putin’s assault on Ukraine in February 2022.

The price cap, updated every quarter, sets a notional maximum that can be charged to customers for energy bills.

Brearley insisted that suppliers should take pains to support billpayers facing difficulties.

“This is a difficult time for many people“, he said, “and any increase in bills will be worrying“.

The Ofgem boss drew comfort from what he called a return of choice to home energy tariffs.

“Customers could benefit from shopping around with a range of tariffs now available offering the security of a fixed rate or a more flexible deal that tracks below the price cap“, he said.

The regulator has acted to raise standards of customer service and worked with suppliers and consumer groups to encourage industry to support those struggling with their bills, including the Winter 2023  Voluntary Debt Commitment  recently announced by Energy UK and Citizens Advice.

The regulator has also published today a statutory consultation on levelling standing charges for prepayment meter and direct debit customers so customers pay the same daily charge.

Previously, customers on prepayment have been charged more than those who pay by direct debit to cover the additional costs and resources required by suppliers to provide their services.

In October 2022, the government introduced measures to temporarily remove this ‘PPM premium’ via the Energy Price Guarantee, which remains in place until April 2024.

Anti-poverty advisors Citizens Advice echoed Ofgem’s call for suppliers to do more to support struggling account-holders.

Gillian Cooper, the charity’s director of energy, said:  “Prices going up during the coldest part of the year will make life harder for millions of people who are already struggling.

“We’re already helping record numbers with energy debt and we’re seeing more people than ever who can’t afford to top up their prepayment meter“.

She criticised chancellor Jeremy Hunt’s neglect of fuel poverty in yesterday’s Autumn Statement “The government missed the opportunity to announce extra support for households who desperately need it this winter. The lack of action means far too many households will now be forced to choose between heating and eating this winter“.

“We urgently need the government to honour its commitment to look at options for providing targeted financial support with energy bills from April 2024.”

At analysts Cornwall Insight, Dr Craig Lowrey noted today’s rise is a reverse on optimism twelve months ago that stability might be returning to world markets for power.

“With little in the way of direct energy bill support coming out of the Autumn Statement”,  Lowrey noted, “consumers are likely to look at lowering usage to counteract high bills, which remain well above their historic averages.

“As we move into 2024, it’s not just the persistently high unit costs that will be a worry; the looming rise in electricity standing charges from April adds another layer to the equation“.

Standing charges for both gas and electricity already account for 16% of average household bills, the Cornwall Insight expert observed.

“Fundamentally the solution extends beyond tweaking energy bills,“ Lowrey went on. “We need a long-term strategy that reduces our dependence on imports of energy, particularly gas. By investing in domestic renewable energy sources, we can start to break free from the international market fluctuations and stabilise our energy prices for homes and businesses alike.”

Sam Richards, founder of pro-growth campaign group Britain Remade, echoed the Cornwall analyst: “As winter sets in, the prospect of the Energy Price Cap increasing by £94 will be worrying news for millions of households up and down the country who are still facing eye-wateringly high energy bills.

“The only way to rapidly bring bills down is to turbocharge the roll-out of clean secure sources of domestic energy.

“The government should start by making sure new onshore wind farms in England can actually get built – unlocking one of the cheapest sources of energy available“.

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Ofgem today injects steel into its Code of Conduct governing the controversial devices, making compulsory rules which until now suppliers could ignore.

After a public consultation over the summer, the meters code will now be embedded in energy companies’ supply licences. Breaches lay retailers open to enforcement action and fines.

In April, at the regulator’s urging, all energy companies signed up to the then voluntary guidelines.

At that time, the no-install rule applied to customers aged 85 or older, or to households with residents facing health problems including terminal illnesses or other medical dependencies.

No suppliers are thought at present to be carrying out involuntary installations.

The new rules  come into effect on 8 November after a mandatory 56-day notice period. Ofgem says they will ensure they are acting in a fair and responsible way with involuntary installations used only as a last resort.

Ofgem’s strategy director Neil Kenward said: “Protecting the most vulnerable consumers is at the heart of what we do, and this decision not only cements the protections Ofgem put in place for people deemed most at risk, it goes further to protect the most vulnerable household

Citizens Advice is conducting its own enquiry into the meters, and suppliers’ remote switching of clients facing payment difficulties.

Last year the charity advised more people without eough cash to top up their prepayment meter than for all of the previous 10 years combined.

“The harm caused by the prepayment meter scandal must never be allowed to be repeated”, its boss Dame Claire Moriarty said this morning.

“As energy bills soared, far too many people were forced onto meters they simply couldn’t afford to keep topped up, often with devastating results”, she went on.

“Ofgem’s decision does not go far enough to stop all families with children aged 5 and under from being forced onto a prepayment meter. That poses a significant risk which we will be monitoring closely.

“As we head into what will be yet another incredibly difficult winter for many, it’s essential suppliers ensure that none of their vulnerable customers are forced onto a prepayment meter”.

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Ofgem announced this morning it had secured voluntary sign-up from all Britain’s suppliers for better practice, following recent scandals of forced entry by contractors employed by big power companies.

Under the new rules, a supplier must now demonstrate at least ten attempts to contact a billpayer in poor standing, before instructing enforced installation of a meter.

Energy firms must now make welfare assessments of homes at risk of default.  Where medical equipment incurs high bills, new tougher enforcement curbs apply. Consumers aged 85 living along cannot have meters forcibly installed.

Citizens Advice chief executive Dame Clare Moriarty said: “This voluntary code of practice is a much needed improvement in the protections people have against the forced installation of a prepayment meter by energy companies

“It’s now up to suppliers to follow the rules and for Ofgem to crack down quickly on any sign of bad practice. The regulator must also act swiftly to make this voluntary code mandatory.

“For too many the damage has already been done. Suppliers must now check that none of their existing customers are paying for their energy via a prepay meter when it’s not a safe option for them.”

The regulator announced this morning a cessation of all involuntary installations of card- or coin-operated meters, such as contractors entering homes under court order, or suppliers switching meters on remotely.   Both Citizens Advice and suppliers represented by Energy UK had taken part in the talks.

Ofgem promised to monitor the new PPM regime, and said it was already investigating the legacy of recent poor practice.

No suppliers should restart involuntary PPMs until they can demonstrate readiness to implement the new Code, it said.

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