The National Energy Action (NEA) charity published its response on 20 July 2022 to two Ofgem consultations: one on strengthening retail financial resilience, and a statutory consultation on strengthening Direct Debit rules1. The response sets out the charity's position on both.
On financial resilience, NEA argues that the proposed rules should only be implemented if they do not lead to an increase in the level of the price cap1. The charity's stated concern is the effect of any such increase on the level of the cap itself.
On Direct Debit, the charity's position is supportive. NEA fully supports the strengthening of direct debit rules1.
"NEA argues that the proposed rules on financial resilience should only be implemented if they do not lead to an increase in the level of the price cap. NEA fully supports the strengthening of direct debit rules."
The response document itself is available as a PDF from the charity's publications page1. The consultation outcome, and whether Ofgem accepted the argument that resilience rules should not raise the cap, has not been reported in the material available.
Why it matters for households
The price cap sets the maximum a supplier can charge for a unit of energy on a default tariff, so anything that feeds into its level reaches every household on one. NEA's argument is that the cost of making suppliers more financially resilient should not be passed through into that cap1. How the price cap is calculated, and what sits inside it, therefore bears directly on what a home pays.
Direct Debit rules matter because the payment method a household uses changes the rate it pays. Ofgem sets different cap rates for Direct Debit, prepayment and standard credit, and the gap between them is a live issue for households weighing up how to pay. Strengthening the rules on Direct Debit touches on how suppliers set and adjust those payments, and on the credit balances that build up when a Direct Debit is set above actual use.
For a household, the practical link between the two consultations is this: resilience rules shape what suppliers must hold and how they are supervised, and if those costs land in the cap, they land on bills. NEA's condition is aimed at keeping that from happening1. The financial resilience rules themselves are a matter for Ofgem as regulator, and the Direct Debit changes sit within the same regulation and policy area.
What happens next
No next steps are set out in the material available. The response is dated 20 July 20221; what Ofgem did with the responses to either consultation has not been reported.