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Citizens Advice response to the Ofgem consultation on levelling the cost of standing charges on prepayment meters

5 October 2023

Citizens Advice response to the Ofgem consultation on levelling the cost of standing charges on prepayment meters [ 250 kb]

We continue to support some levelisation of payment method cost differentials. We believe that the levelisation should:

  • Apply to standard credit (SC) customers as well as prepayment (PPM) as both have a higher proportion of customers in vulnerable circumstances compared to those who pay by direct debit.

  • Maintain some degree of cost-reflectivity to ensure consumers still have an effective incentive to choose more efficient payment methods. This needs to also ensure that prices do not create an unjustified incentive for consumers to choose a payment type that may not be suitable for their needs.

We assess that this means the following for how levelisation should be applied:

  • Standing charges should be levelised across payment types.

  • Unit rates should be partially levelised. Levelising the bad debt element of unit rates for SC would be a sensible way to do this.