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Special features of electricity and gas arrears
If there are arrears fuel supplies may be disconnected, therefore this is potentially a priority debt. The prioritisation of the debt depends on the client’s continued need for that fuel at their present address.
A supply can only be disconnected at the address to which the bill relates.
Note: a supplier cannot transfer a debt from a previous property to a new account and then disconnect that fuel supply for the previous debt.
It may be possible to reduce charges by changing supplier. Under the Gas Act 1986, standard conditions of gas supply licence (SLC) condition 14, if the arrears are not in dispute and meet the definition of outstanding charges per condition 1.2 ’at least 28 days old and remain unpaid’, the old supplier can object to the transfer unless the arrears are paid.
This does not apply to clients with prepayment meters, provided the debt does not exceed £500 and the client agrees that the new supplier can collect the arrears through the meter. If the client has both gas and electricity from the same supplier, the figure is £500 per fuel.
A prepayment meter can only be fitted at the address to which the bill relates (unless the client requests otherwise).
Estimated bills
Estimated bills are a common way to accrue arrears. Many bills are based on estimated meter readings. Under their licence conditions, suppliers are only required to obtain actual meter readings once every two years. If the estimated reading is different to the actual reading, the client should read the meter themself and ask for this reading to be used to avoid either an overpayment or an underpayment which could lead to arrears.
If the bill is estimated and the estimated reading is higher than the actual reading, it is possible to reduce the amount owing. The bill will explain (often by means of an ‘E’ next to a reading) whether an estimated reading has been given. Clients can read their own meters and provide the supplier with their reading, and so should never be disconnected on the basis of an estimated bill. You should ask the client to read the meter and request an amended bill. The roll-out of smart meters should, in theory, see the end of estimated billing as the meter sends consumption information to the supplier and allows accurate bills to be produced regularly.
When a client pays by direct debit, suppliers estimate future usage (eg, over the winter) when setting the amount of a direct debit. Suppliers should estimate based on the best and most current information available. You should, therefore, advise clients who pay by direct debit to regularly check their usage and provide accurate and up-to-date readings to suppliers where it appears a direct debit may have been set at an unreasonably high level.
Backbilling
When a supplier issues a bill, it can only seek to recover charges for energy consumed in the previous 12 months unless:1What to do if you get a back bill | Ofgem
    it has previously issued a compliant bill and is chasing previously billed charges; or
    the client behaves in an ‘obstructive or manifestly unreasonable way’ – eg, by physically preventing access to the meter or stealing fuel.
Ofgem has confirmed that it does not consider a client to be ‘obstructive or manifestly unreasonable’ when they do not supply a meter reading.2Ofgem, Decision: Modification of the electricity and gas supply licences to introduce rules on backbilling to improve customer outcomes, ofgem.gov.uk/system/files/docs/2018/03/backbilling_final_decision_policy_document_-_march_5_-_website.pdf If clients do not respond to requests for a meter reading, suppliers should take a meter reading themselves to avoid billing based on estimates. This means suppliers will have to put more effort into obtaining meter readings from their customers.
 
2     Ofgem, Decision: Modification of the electricity and gas supply licences to introduce rules on backbilling to improve customer outcomes, ofgem.gov.uk/system/files/docs/2018/03/backbilling_final_decision_policy_document_-_march_5_-_website.pdf »
Warm Home Discount
Clients on a low income (eg, getting pension credit) might also qualify for a £150 Warm Home Discount. See the section on Scotland at gov.uk/the-warm-home-discount-scheme for more details.
Extra support
As energy prices are volatile and bills are high, Ofgem recognises many people need extra support. It has published guidance to help advisers. You can see the latest version at ofgem.gov.uk/publications/domestic-energy-consumer-advice.
In 2022, Ofgem issued guidance to suppliers1Ofgem, Good practice for supporting customers in payment difficulty, September 2022, available at ofgem.gov.uk/publications/good-practice-supporting-customers-payment-difficulty and also sent them an open letter setting out the key regulatory expectations on suppliers when supporting customers in payment difficulty.2Ofgem, Regulatory expectations on supporting customers in payment difficulty, available at ofgem.gov.uk/publications/regulatory-expectations-supporting-customers-payment-difficulty Ofgem expects suppliers to take the following actions in line with their licence obligations.
    Ensure customers can easily contact their supplier and are treated fairly when they do.
    Identify customers in vulnerable situations and provide additional support where appropriate, including ensuring that Priority Services Register data is up to date.
    Make proactive contact with customers in payment difficulty through a range of communication methods.
    Always take into account a customer’s ability to pay, including before escalating the debt recovery process, giving due consideration to information provided by third parties representing them, including use of the Standard Financial Statement.
    Ensure prepayment meters are safe and reasonably practicable in every case and act quickly to change the meter to non-prepayment if necessary. Additional credit support should be offered to customers who have self-disconnected or self-rationed where it is in their best interest and/or where they are in a vulnerable situation. Involuntary-fitting a prepayment meter under warrant is always a last resort and all other routes of debt recovery should be fully exhausted before applying for a warrant.
    Debt recovery action should always be fair and proportionate, and not escalated too quickly. Ensure third-party debt collection agencies treat customers fairly.
Force-fitting prepayment meters
From 18 April 2023, a new code of practice sets out how suppliers should deal with clients when considering whether to install an involuntary prepayment meter.3Ofgem, Involuntary prepayment meter energy supplier Code of Practice, April 2023, available at ofgem.gov.uk/publications/involuntary-prepayment-meter-energy-supplier-code-practice This means that a prepayment meter can be installed with a warrant, or a mart meterswitched to prepayment meter mode, to recover debt owed without the client’s consent. All suppliers have signed up to this code. The code includes requires suppliers (and their contractors) to:
    make at least 10 attempts to contact a customer before forced installation of a prepayment meter;
    carry out a site welfare visit before a prepayment meter is installed;
    refrain from all forced installations for the highest risk customers including:
      households which require a continuous supply for health reasons;
      people over 85 (where there is no other support in the property);
      households with residents with severe health issues, including terminal illnesses or those with a medical dependency on a warm home;
      where there is no one within the household who has the ability to top up the meter due to physical or mental incapacity;
    wear audio or body cameras on all warrant installation or site welfare visits to check for vulnerabilities (footage to be available for audit);
    give a £30 credit per meter (or equivalent non-disconnection period) on all warrant installations or remote switches as a short-term measure to remove the risk of customers going off supply;
    reassess the case once a customer has repaid debts owed and contact the customer to offer assessment of whether prepayment remains the most suitable and preferred payment method of choice for the customer.
From 8 November 2023, Ofgem guidance for vulnerable customers with prepayment meters provides for:4ofgem.gov.uk/news/new-rules-installing-involuntary-prepayment-meters
    suppliers to refrain from involuntary installations for people aged over 75 with no support in their house and in households with children aged under two (this previously only applied to the people or households listed above);
    the voluntary code of practice which came into force in April 2023 (see above) to be made mandatory by becoming part of the suppliers’ licence conditions, which if broken could result in enforcement action and fines.
 
1     Ofgem, Good practice for supporting customers in payment difficulty, September 2022, available at ofgem.gov.uk/publications/good-practice-supporting-customers-payment-difficulty »
2     Ofgem, Regulatory expectations on supporting customers in payment difficulty, available at ofgem.gov.uk/publications/regulatory-expectations-supporting-customers-payment-difficulty »
3     Ofgem, Involuntary prepayment meter energy supplier Code of Practice, April 2023, available at ofgem.gov.uk/publications/involuntary-prepayment-meter-energy-supplier-code-practice  »
Other assistance
Clients may be able to get a grant to pay off fuel debts. Some energy suppliers have trust funds to help customers who are in debt or may fund projects for the fuel poor. Grants are available for electricity and gas bills and may also be available to pay other essential household bills.
In response to increasing fuel prices, the British Gas Energy Trust (BGET) launched the British Gas Energy Support Fund and the Individuals and Families Fund to help British Gas customers with debts of £2,000 who have not received a grant from BGET within the previous 12 months.1See BGET.org.uk These new funds aim to help those who are most financially vulnerable with their fuel bills.
Auriga Services (which works with utility companies to assist customers who are vulnerable or in financial hardship) publishes a booklet summarising the schemes, called Help with water and energy bills, available at aurigaservices.co.uk/wp-content/uploads/2019/10/Auriga_waterandenergy_Online.pdf.
Clients can also take steps to help save energy and reduce fuel bills. The Energy Saving Trust offers free advice on ways to reduce fuel consumption and should be aware of grants that are available locally to help cover the cost of energy efficiency measures. See energysavingtrust.org.uk or telephone Home Energy Scotland on 0808 808 2282.
All suppliers must provide a range of free services (including quarterly meter readings) to clients who are on their Priority Services Register. This is available to clients who:
    have a disability or long-term health condition; or
    are over pension age; or
    have a hearing or sight condition; or
    are pregnant or have children under five; or
    have a mental health condition; or
    have experienced domestic abuse; or
    have extra communication needs – eg, they do not speak or read English well.
See CPAG’s Fuel Rights Handbook for more details.
 
1     See BGET.org.uk »