Ofgem confirmed in November 2023 that it will determine on a supplier-by-supplier basis when new stringent licence conditions have been met and suppliers are ready to restart involuntary prepayment meter (PPM) installations1. The confirmation followed a market-wide moratorium under which all suppliers paused involuntary installations from February 20231.
The sequence of events is set out in an Energy UK briefing published on 8 January 2024. Ofgem began investigating reports related to supplier practice and a review of PPM licence conditions in February 2023, the same month suppliers paused involuntary installations1. In April 2023 energy suppliers signed up to a new Code of Practice for the involuntary installation of PPMs under warrant, developed by Energy UK, Ofgem and the Government1. In August 2023, under Government direction, Ofgem sought to permanently end the premium placed on PPM customers, and carried out a Call for Evidence on levelling the cost of the standing charge across PPMs; a decision was still awaited at the time of publication1. Ofgem confirmed the Code of Practice had been made mandatory as part of the supplier licence conditions in September 20231.
"Ofgem confirms it will be determining on a supplier-by-supplier basis when new stringent licence conditions have been met and they are ready to restart installs."
The briefing states that involuntary PPMs are a last resort and that suppliers will only be allowed to restart installations when they can satisfy Ofgem's restart conditions1. It lists the requirements as including 10 attempts by the supplier to contact the customer and arrange a payment plan, and a "Do not install" category covering certain health issues, households with children under two, and households where occupants are over 75 and do not have support in the household1. Prices for PPM customers are now the same as those of direct debit customers; previously Ofgem's price cap meant PPM customers paid more1. Customers at risk of going off supply can request and receive credit from their supplier1.
| Date | Development |
|---|---|
| February 2023 | Ofgem investigates supplier practice and begins review of PPM licence conditions; all suppliers pause involuntary installations |
| April 2023 | Suppliers sign up to a new Code of Practice for involuntary PPM installation under warrant |
| August 2023 | Under Government direction, Ofgem seeks to end the PPM price premium; Call for Evidence on standing charge levelling |
| September 2023 | Ofgem confirms the Code of Practice is mandatory in supplier licence conditions |
| November 2023 | Ofgem confirms supplier-by-supplier determination of restart readiness |
| January 2024 | Suppliers meeting Ofgem's requirements granted permission to restart involuntary installations |
Energy debt is at a record £2.9 billion, a figure that excludes money owed by direct debit customers, debt on PPMs, debt less than 90 days old, and final debt after a change of tenancy1. Energy UK estimates the actual amount owed to suppliers is 2.5 to 3.3 times higher than reported and rising fast1. Ofgem estimates the moratorium on involuntary PPM installations added £25m per month of additional debt-related costs1. The briefing states the energy retail market has been loss-making on average over recent years1.
Why it matters for households
The restart decision sits with Ofgem rather than being applied across the market at once, so whether involuntary installations resume depends on which supplier has satisfied the conditions. For a household, the practical effect is that the protections attached to the licence conditions, including the contact attempts and the "Do not install" categories, apply as a condition of any restart rather than as guidance1. The briefing states that smart PPMs allow suppliers to analyse data directly to see if a customer is at risk of self-disconnection, and that PPMs allow customers with built-up debt to repay it in agreed fixed instalments1. Debt levels affect all bills, because bad debt is ultimately recouped from paying customers1. Twelve suppliers are signed up to the Energy UK Vulnerability Commitment, which the briefing says now covers 90% of the domestic retail energy market1.
What happens next
The briefing records that in January 2024 suppliers that had satisfied Ofgem's requirements were granted permission to restart involuntary installations1. A decision on the Call for Evidence regarding levelling the standing charge across PPMs had not been made at the time of publication1. Energy UK states the Government needs to deliver a consultation on targeted bill support for vulnerable customers, funded through general taxation1. No further dates have been reported.