Levels of disconnections down substantially in U.K.


London, U.K. — (METERING.COM) — January 29, 2008 – Levels of disconnections have dropped significantly in the U.K., from over 17,000 per year in 2003 to around 5,000 currently, while despite the rising energy prices and increasing personal debt, the numbers of customers repaying an energy debt has remained relatively stable.

These are among the findings of a new review of debts and disconnections by Ofgem, the energy regulator, working with the gas and electricity watchdog energywatch, aimed at assessing the policies and processes of energy suppliers in this area.

The review reports that in general the suppliers had made “real progress” on debts and disconnections over the past three years, albeit some more than others. Those suppliers who are leading the way have a clear management and organizational focus in this area. They are proactive, focused on debt prevention rather than debt management, provide holistic solutions to customers, monitor their performance regularly, and periodically review their debt and disconnection policies to ensure they are effective and fit for purpose.

Among the suppliers npower was found to still have the most improvement to make to bring it in line with the practices of the other suppliers, particularly in terms of focusing on the early resolution of debt to prevent the need for disconnection.

All of the suppliers understand that communication with customers is essential in preventing and managing debt and have revised their procedures to incorporate more and earlier proactive contact. Most suppliers are trialing different methods and channels of communication in an attempt to reach more customers. There have also been increased efforts by suppliers to attempt to identify their vulnerable customers where they can.

Nevertheless there is still scope for further improvement, according to the review. Suppliers’ letters to customers can be further improved, as can telephonic access to the suppliers. Suppliers should also continue efforts to identify vulnerable customers at every opportunity and ensure their circumstances are considered, and it is important that the suppliers signal the help that is available to customers, both in managing their energy bills and through the suppliers’ own social tariffs and support schemes.

Approximately two-thirds of the disconnections are in gas and one-third in electricity, possibly due in part to the inability to install gas prepayment meters in certain instances, as an alternative to disconnection, because of safety reasons. At the end of 2006 approximately 5 percent of electricity and 4 percent of gas customers were repaying a debt, with 61 percent of these being credit customers and 39 percent prepayment customers.