Ofgem published its decision on involuntary prepayment meters (PPMs) on 13 September 2023, integrating the Involuntary PPM Code of Practice into Supply Licence Conditions and updated PPM Guidance1. The changes set out in the modification notices published alongside the decision take effect from 8 November 20231.
The decision follows a call for evidence launched on 21 February 2023, the Involuntary PPM Code of Practice published on 18/04/2023, and a statutory consultation that opened on 28 June 20231. Ofgem said it had decided to move children under two into the "do not install" category, and to move over 75s with no other support in the household into the same category1. Households with children five and under remain in the "further assessment needed" category1.
Other changes confirmed in the decision include adding chronic obstructive pulmonary disease (COPD) as a collective term in "do not install", and adding nutritional issues and learning disabilities, in addition to difficulties, into "further assessment needed"1. Ofgem retained expectations that suppliers satisfy themselves that a PPM is safe and reasonably practicable for households with adults aged over 65 before installing one, and retained the proposal that suppliers are encouraged to satisfy children aged under 161.
"This document outlines our decision to integrate the Involuntary PPM Code of Practice into Supply Licence Conditions (SLCs) and updated PPM Guidance (Safe and Reasonably Practicable)."
On costs, Ofgem said it now estimates bad debt could be £4 to £16 per household per year in a range of most likely scenarios, against an earlier estimate of between £3 and £14 per household1. It said it is introducing a specific allowance to the price cap from 1 October 2023 for anticipated increased costs of bad debt associated with Additional Support Credit given to PPM customers, following a decision published on 25 August, and that the allowance will be in the cap for 12 months initially1. Ofgem also said that in its update letter of 28 June 2023 it had confirmed that, on the evidence received up to that point, it considered there was not a material or systematic gap between the allowance within the price cap for debt-related costs, including bad debt, and actual costs1.
| Category | Position in the decision |
|---|---|
| Children under two | Moved into "do not install"1 |
| Adults over 75, no other support in household | Moved into "do not install"1 |
| Children five and under | Remain in "further assessment needed"1 |
| COPD | Added as a collective term in "do not install"1 |
| Nutritional issues, learning disabilities | Added to "further assessment needed"1 |
| Adults over 65 | Suppliers expected to satisfy themselves a PPM is safe and reasonably practicable1 |
Why it matters for households
The rules determine which homes can be switched to prepayment without consent, whether by fitting a meter or by switching a smart meter remotely. For households in the expanded "do not install" groups, an involuntary PPM should not be considered safe and reasonably practicable at all. For those in "further assessment needed", the supplier must assess the individual situation before proceeding. The prepayment meter moratorium remains in place, and Ofgem has set restart conditions suppliers must meet before it will support renewed involuntary installations1. The decision also affects costs spread across all billpayers: the bad debt figures cited are per household per year, and the specific allowance sits in the price cap from 1 October 20231. The Energy Bill Support Scheme ended in March 2023, which Ofgem said is reflected in its forecast for April 2023 to March 20241. The wider framework sits within Ofgem's remit and the prepayment and vulnerable customer rules, with supplier obligations set out in supplier conduct on prepayment and debt.
What happens next
The licence and guidance changes take effect from 8 November 20231. Ofgem said it expects to consult on a further matter in spring 20241. It has not reported a date for the end of the moratorium on involuntary PPM installations.
Sources1 cited
- Involuntary PPM, ofgem.gov.uk