Most of the new licence conditions covering domestic energy supply took effect on 14 December 2023, 56 days after Ofgem published its decision on 18 October 20231.
The changes add new licence conditions 27.5B, 27.8A and 31G.3A to 31G.3E1. They require suppliers to be available via contact methods that meet customer needs, to be open at times that meet customer needs, to be free for customers struggling to pay their bills, and to prioritise vulnerable customers who need immediate support or their representatives1. Ofgem also decided to proceed with the introduction of SLC 31G.3A as set out in its statutory consultation1.
On supporting customers in debt, the decision states that 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 offering temporary debt repayment holidays where appropriate1. Ofgem said it updated the drafting of the licence and guidance to clarify that this condition relates to customers who are having or will have difficulty paying their energy bills only1.
Suppliers will also be required to publish information on their Citizens Advice star rating performance1. Ofgem said it is keen for a voluntary industry solution to come forward in a timely manner on incentives for suppliers to improve performance1.
"The majority of our licence conditions will go live from 14 December 2023 (ie 56 days after the decision is published)."
Ofgem estimated a possible costs range of around £2-4 per customer per year, not including any illustrative benefits it monetised1. It cited evidence that overall domestic consumer satisfaction with customer service from energy suppliers fell from 74% in Q4 2018 to 66% in Q4 20221.
| Date | Stage |
|---|---|
| 03/05/2023 | Policy consultation published |
| 31/05/2023 | Policy consultation closed |
| 26/07/2023 | Statutory consultation published |
| 23/08/2023 | Statutory consultation closed |
| 18/10/2023 | Decision on licence changes |
| 14/12/2023 | Licence changes take effect |
Why it matters for households
The conditions apply to domestic supply, so they shape how a household reaches its supplier when something goes wrong with a bill, a meter or a payment arrangement. Contact routes that are free for customers in payment difficulty, and opening hours set to meet customer needs, bear directly on whether a household can resolve an issue before debt builds. The requirement to base repayment plans on ability to pay, including pausing repayments where a customer cannot pay, affects how a household manages arrears. Publishing Citizens Advice star ratings gives households a comparable view of supplier performance. Ofgem's own figure of 74% to 66% satisfaction between Q4 2018 and Q4 2022 is the stated backdrop1.
What happens next
Ofgem said a licence requirement on call waiting times will only be brought into effect after consultation and with at least two months' notice1. No date for that consultation has been reported. The decision also notes that the Code requirements remained in place until 8 November 20231.
Sources1 cited
- Consumer standards - Decision, ofgem.gov.uk