Ofgem published its Stage 5 decision on consumer standards licence changes on 18 October 2023, confirming modifications to the standard conditions of the gas and electricity supply licences1.
The modifications add a new condition SLC 27.5B, amend SLC 27.8A, and add new conditions SLC 31G.3A to 31G.3E1. Ofgem said the changes are intended to make it easier for domestic customers to contact their supplier and to help those struggling with bills, and to require suppliers to publish information on their customer service performance1.
Under the contact ease rules, suppliers must be available via contact methods that meet customer needs, be open at times that meet customer needs, be free for customers struggling to pay, and prioritise vulnerable customers who need immediate support or their representatives1. Ofgem cited call waiting times as an example, referring to periods "significantly or consistently longer than specific time periods to respond to queries (eg 5 minutes on average each month to answer phone calls)"1.
On debt support, Ofgem said repayment plans must be based on ability to pay, including considering temporary pausing of scheduled repayments when customers are unable to pay1. Suppliers must be proactive and offer debt repayment plans at the earliest opportunity, and give due consideration to temporary debt repayment holidays where appropriate1. Ofgem also confirmed it had updated drafting to clarify that the condition relates to customers who are having or will have difficulty paying their energy bills only1.
The decision also introduces new licence requirements compelling suppliers to publish information on their Citizens Advice star rating performance1. All suppliers will need to have regard to Ofgem's guidance document1.
"our new rules will take effect from 8 November 2023, with the Code requirements remaining in place until this date"
Ofgem set out the decision-making stages, from the Stage 1 policy consultation on 3 May 2023 to the Stage 5 decision on 18 October 20231. It estimated a possible costs range of around £2-4 per customer per year, not including any illustrative benefits it had monetised1. Ofgem said it did not consider the rules would have a significant impact on suppliers and so did not deem a Section 5A Impact Assessment necessary1.
Ofgem reported that overall domestic consumer satisfaction with customer service from energy suppliers fell from 74% in Q4 2018 to 66% in Q4 20221. It said responses to consultation were mixed, with consumer representatives generally supportive and some suppliers concerned the contact ease proposals were too prescriptive, too expensive, required further clarification and needed longer to implement1.
Why it matters for households
The conditions change what a household can expect from its supplier as a matter of licence obligation rather than discretion. Contact ease provisions bear on how quickly a home can reach its supplier about billing, consumption or payment difficulty, which affects how far a household can manage its own energy costs without third-party help. The debt support conditions require repayment plans to reflect ability to pay, which bears on whether a household can keep supply arrangements in place while clearing arrears. Publishing Citizens Advice star ratings gives households a visible measure of supplier performance when comparing service, though the decision does not set a minimum rating. The estimated cost of around £2-4 per customer per year is passed through to customers1.
What happens next
Ofgem said the new rules take effect from 8 November 2023, with Code requirements remaining in place until that date1. The licence changes set out in the modification notices published alongside the decision take effect from 14 December 2023, which Ofgem described as 56 days after the decision is published1. Ofgem said it is keen for a voluntary industry solution to come forward in a timely manner, and that one licence requirement will only be brought into effect after consultation and with at least two months' notice1.
Sources1 cited
- Consumer standards - Decision, ofgem.gov.uk