Spotlight on prepayment meters


David Orr,
Chief Executive,
National Housing
London, U.K. — (METERING.COM) — September 2, 2008 – The U.K.’s National Housing Federation, which represents 1,300 non-profit housing associations, has launched its Energy Action Week, and is calling on members to lobby against higher tariffs for electricity and gas prepayment (pay-as-you-go) meters.

A recent poll carried out by YouGov for the Federation revealed that 80 percent of the public say they want the Chancellor of the Exchequer to stop energy companies from charging prepayment meter customers higher premiums; 79% say that the energy regulator Ofgem has failed in its duty to protect all customers equally.

The Federation says that prepayment meter customers are charged up to £300 ($540) a year more than more affluent customers on online tariffs. It is concerned that a cold winter could see many prepayment customers going without gas and electricity because they cannot afford to top up their meters.

Research carried out for the Federation earlier this year found that more than half a million people had to go without gas or electricity at some stage during the last twelve months because they could not afford to top up their prepayment meter.

Some utilities have heeded the call to standardize tariffs, Scottish Power and E.ON being notable examples. Others such as British Gas, npower, EDF, and Scottish and Southern Energy, continue to charge prepayment customers more for their power. They maintain that the meters are more expensive to purchase; that they need to pay for the smart cards or tokens used to top up the meters, as well as paying the vending outlets that stock the tokens; and have to cover the cost of engineers who fit and upgrade the meters.

However, Federation chief executive David Orr said: “E.ON’s move proves the energy companies can afford to bring their prepayment tariffs into line with standard credit charges, and blows apart their competitors’ argument that they need to charge prepay customers more for their fuel to cover the costs of maintaining the meters.”

As part of Energy Action Week, the Federation is encouraging its members to approach their Members of Parliament to put pressure on the Minister of Energy to pass legislation which will end the dual tariff system.