4. Arrears as a result of estimated bills
Estimated bills are a common way to accrue arrears. The former Energywatch indicated that where gas arrears built up over an extended period because of a succession of estimated bills, repayment of the arrears could be made over an equivalent, extended period if you would otherwise be caused hardship. This remains a sound principle.
Since 1 May 2018, suppliers have been prohibited from sending you a retrospective bill (back-bill), or otherwise recover, beyond 12 months.1Condition 21BA.1 SLC These back-bills result from a supplier’s failure to undertake an actual meter reading or problems with a supplier’s billing system and only sending you a bill once an accurate meter reading is taken. This is subject to certain exceptions and does not apply if you have been obstructive or unreasonable, such as preventing a supplier from taking or receiving accurate meter readings, including obstructing access to the meter or tampering with the meter.2Condition 21BA.2 SLC You are not at fault for failing to provide a supplier with an accurate meter reading. If you cannot afford the rate of repayment of arrears because you have received a large back-bill, you should be allowed to repay the arrears at a rate you can genuinely afford (see here). Your supplier may request that a prepayment meter be fitted as a way to manage arrears, particularly if you are only able to offer very low repayments. However, they are prohibited from an involuntary installation of prepayment meters or remote recalibration of smart meters into prepayment mode for the most vulnerable households (see here).3Condition 28 SLC Suppliers can apply for involuntary deductions to be made from benefits to recover arrears,4Sch 6 paras 8(4), 9(6) and 9(7) UC,PIP,JSA&ESA(C&P) Regs but since 1 April 2023, are prohibited for ongoing consumption.5Regs 2 and 3 The Social Security Benefits (Claims and Payments) (Amendment) Regulations 2023 No.232 If you are experiencing genuine financial hardship and would prefer not to have a prepayment meter, it is not safe or reasonably practicable or you have a vulnerability (eg, a mental impairment), your supplier should also offer you a range of other options for repayment. If it does not, contact Citizens Advice consumer service or Advice Direct Scotland for further advice. Also check your supplier’s codes of practice on the payment of bills and prepayment meters. Involuntary installation of a prepayment meter, as with disconnections, should be a last resort for customers in payment difficulty. If you disagree with a bill, you should pay a reasonable estimate of your usage. Once an accurate bill is produced by the supplier, you should seek a refund for overpaid sums or ask that overpaid sums be credited for future usage.
Where arrears have accrued because of estimated billing, ensure that your supplier has adhered to the minimum standards for meter reading (see here). Standard Licence Condition 21B may also be useful. This sets out the minimum standards suppliers must follow and their responsibilities to ensure accurate and clear bills. It includes commitments to obtain and record the most up-to-date and accurate meter readings and that any payments are set at the right level. It is advisable to take your own readings regularly – at least once every three months – to ensure that a supplier’s estimate of your consumption is correct. Suppliers usually amend estimated bills if you give them your own reading. The roll-out of smart meters should, in theory, see the end of estimated billing as the meter sends information to your supplier remotely about how much energy you have used and allows accurate bills to be produced regularly. Where smart meters are already installed, suppliers must offer to provide or make available accurate monthly billing information based on consumption and billing information, if requested.6Condition 21B.5A SLC