Ofgem to introduce new rules to help customers struggling with energy bills- what does this mean for energy suppliers?

What are the new rules?

At the start of the Covid-19 outbreak, energy suppliers voluntarily agreed to introduce support to their most vulnerable customers. These new licencing rules will now enshrine that support as a requirement.

The new rules will require energy suppliers to offer emergency credit to customers using prepayment meters if they cannot top them up.

Those customers who are in debt to their energy supplier must also be provided with what Ofgem calls a ‘realistic and sustainable’ repayment plan.

Ofgem also wants to ensure that energy suppliers have appropriate credit management policies in place and being proactive when it comes to contacting their customers and setting up repayment rates based on their ability to pay.

"Energy is an essential service and everyone should be confident they can adequately heat their home and protect their health - especially during a global pandemic. We've been pressing for the measures agreed between government and energy suppliers to help people through the coronavirus pandemic to be extended and widened, so we're very pleased to see this announcement from the regulator," said Citizen Advice's chief executive Dame Gillian Guy.

Also read: Add your customers to the Priority Service register with Dyball's CRM

What does this mean for energy suppliers?

From December 15^th the new rules will be enforced by Ofgem and have been added to the licence rules to ensure that energy suppliers are formally notified that they must aid customers in financial difficulty.

The main objective of the new rules is to help the most vulnerable customers, often those on prepaid meters that can run out of credit due to having to self-isolate as a result of Covid-19 or are unable to visit their local shop in order to top up their credit due to illness.

The hit to the UK economy too has no doubt played a part in the new rules as unemployment rises and the financial impact to household incomes has increased fears of an increase in the number of customers defaulting on their energy bills.

“Suppliers have stepped up to the challenge of supporting their customers during the Covid-19 crisis, especially those in vulnerable situations. Customers who are struggling to pay their bills should contact their supplier as soon as possible. The extra protections we have announced today will help ensure they get some breathing space this winter,” said Philippa Pickford, Ofgem’s director of retail.

Energy suppliers will have to incorporate these new rules into their processes by December 15^th or else face the wrath of the energy regulator.

Suppliers are likely to already be under pressure due to the Covid-19 crisis and may be short staffed as a result.

Demonstrating that they are doing all they can to communicate with their customers will be key to following the new rules. Using CRM software can be a great help with that, and staff will need to be briefed and informed of the new rules.

If you need one-to-one advice or would like information on our energy billing software and CRM system, then get in touch with our team today.

Further Reading

Acquisitions and mergers have been the biggest form of energy supplier growth

As Winter approaches three million households are in Energy Bill debt to Energy Suppliers

Ofgem to increase monitoring of Renewable Energy Guarantees of Origin' (Rego) certificates following Times Investigation

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Through our energy market consultancy services, and the software we’ve developed, we’re supporting new UK electricity and gas suppliers get set up and start supplying.

For more information on how to start and manage an energy company, get in touch with Dyball Associates today.