Number of U.K. customers in debt remains stable but size of debt and disconnections increase


London, U.K. — (METERING.COM) — August 19, 2008 – The number of energy customers in debt in the U.K. remained stable during 2007, although there were small increases in the average debt per customer and an increase in overall disconnection levels, according to Ofgem’s latest review of domestic supplier social obligations.

At the end of 2007, 5 percent of electricity and 3.7 percent of gas customers were repaying a debt. For both fuels, half of those in debt were credit customers (0.6 million electricity and 0.4 million gas credit customers) and half were prepayment customers. These figures are very similar to those of 2006, but the size of the average debt continued to increase, continuing the upward trend started in 2004. While almost two-thirds of both electricity and gas customers owe less than £100 (US$185), 17 percent of electricity customers and 18 percent of gas customers owe more than £300 (US$560).

Moreover the number of disconnections for non payment of debt increased. In 2007 2,657 electricity customers and 5,727 gas customers were disconnected, compared with 1,258 electricity customers and 3,859 gas customers in 2006. According to the report this reflects the growing confidence of suppliers in their debt and disconnection processes, while the higher disconnection rate for gas is thought to be due to the inability of suppliers to install gas prepayment meters as an alternative to disconnection.

The numbers of both electricity and gas prepayment meters also increased during 2007 – both to customers in debt as well as to those without debt. In 2007, 362,000 electricity and 252,000 gas prepayment meters were installed, up from 263,000 electricity and 240,000 gas prepayment meters in 2006.

In terms of their licence conditions suppliers are obliged to offer certain services to specific vulnerable customers such as those of pensionable age and those with disabilities, including access to the Priority Service Register (PSR) and energy efficiency advice. In 2007, 0.8 million electricity and 0.6 million gas customers were on the PSR, while 0.4 percent of all customers were given energy efficiency advice.

Ofgem says that with retail energy prices starting to rise again since the start of 2008, this is likely to result in further increases in the number of customers in debt over the coming year. Given this context, it is essential that suppliers retain a strong focus on this area and do all they can to assist their customers, particularly those who are vulnerable, to manage their energy bills.