Voluntary code of conduct on forced PPM installations due to come into force

The voluntary code of conduct designed to govern the forced installation of prepayment meters (PPMs) is due to come into force from 1 October 2023¹. Energy firms signed up to the code after a scandal over the use of court warrants to force entry into homes in debt¹. Ofgem made the code part of licence conditions from the same date, and the cost premium associated with paying by PPM rather than by direct debit was removed through the Ofgem price cap³.

The End Fuel Poverty Coalition argues the guidelines do not go far enough, failing to protect highly vulnerable groups and failing to help tackle rising energy debt¹. The coalition has urged MPs to back an amendment to the Energy Bill, tabled by Anne McLaughlin, the SNP MP for Glasgow North East, to give ministers the power to ban forced transfers onto PPMs¹. The Energy Bill had its second reading in the House of Commons on 9 May¹.

"The 18th April Voluntary Code of Conduct to prevent the forced installation of prepayment meters doesn't go far enough, so we need the power to properly regulate energy firms and safeguard vulnerable prepayment meter customers handed to the Secretary of State for Energy Security & Net Zero."

The background to the code includes figures on how widely warrants were used. Freedom of information requests revealed 187,000 applications by energy firms in the first six months of 2022 and 500,000 since the end of the Covid lockdown, with some courts approving 500 warrants in under four minutes³. Courts granted over 13,000 warrants allowing energy firms the right to force entry into homes and businesses since a voluntary end to forced PPM installation was introduced in February 2023². Exceptions to that voluntary ban mean firms can still force entry to install PPMs on businesses and enter properties for safety purposes². The Ministry of Justice does not keep data on why energy firms and their agents request warrants to force entry, and only two applications for warrants have been rejected by the courts since February².

Research by an energy firm indicated that while 86% of the 4.5m PPM households did choose to be on a PPM, as many as 14%, or 630,000 households, did not choose to be on the tariffs, which could cost them in excess of £200 more this winter³. Ofgem recognised that inappropriately switching smart meters from credit to prepayment mode is a breach of licence conditions and has repeatedly written to energy firms urging them to stop the practice³.

Figures from the Warm This Winter campaign, from 2,193 people interviewed online between 4 and 5 May 2023, weighted to be representative of the GB adult population¹.

Why it matters for households

A prepayment meter is a form of supply that ends when the credit on it runs out. The coalition describes installation of PPMs as disconnection by the backdoor, and notes that PPM users generally still pay daily standing charge costs even if they have fallen into debt and self-disconnected, and are often made to pay off accrued debt before they can access their heating and power³. For a household, the practical question raised by the code is what protection applies before a meter is changed, and whether a supplier can force a prepayment meter on a home at all. The rules also bear on whether a smart meter can be switched to prepayment without consent, a practice the coalition says breaches licence conditions³. The coalition states that customers can contact Citizens Advice or other representative organisations to challenge installations³.

What happens next

The code comes into force from 1 October 2023¹. The Energy Bill amendment to give ministers power to ban forced PPMs has been tabled, and the coalition urges MPs to add their names to support amendments NC1 and NC2 during the committee stage². The coalition also states that Ofgem later allowed energy firms to restart force fitting prepayment meters in early 2024³.

Sources3 cited

1. MPs urged to ban forced PPMs in Energy Bill, endfuelpoverty.org.uk
2. Courts continue to grant entry warrants to energy firms, endfuelpoverty.org.uk
3. The forced pre-payment meters scandal - End Fuel Poverty Coalition, endfuelpoverty.org.uk