Coronavirus Energy Bailout

New rules from energy regulator Ofgem mean that vulnerable customers struggling to pay their energy bills this winter will be receiving help. To be enforced from the 15th of December, the new rules mean that suppliers will be required to provide struggling customers with emergency credit. This means that customers who are unable to top up prepayment meters must be offered the energy bailout. Furthermore, customers who face being in debt from the credit support must be put on “realistic and sustainable” repayment plans. The coronavirus energy bailout moves come after suppliers voluntarily pledged to support the most vulnerable, left further exposed by the impact of the coronavirus pandemic.

The latest move enshrines the suppliers’ will to support vulnerable people in the form of Ofgem’s newly updated licensing rules, which now obliges energy suppliers to support customers in financial difficulty. In recent months, Ofgem slashed the price cap on default tariffs and prepayment meters, as wholesale gas prices and energy costs dropped significantly. Essentially, the regulator has passed on the savings made by suppliers on to the people, in a move which will benefit millions of households across the United Kingdom.

Director of retail at Ofgem, Phillipa Pickford stated that “Suppliers have stepped up to the challenge of supporting their customers during the Covid-19 crisis, especially those in vulnerable situations. Customers who are struggling to pay their bills should contact their supplier as soon as possible. The extra protections we have announced today will help ensure they get some breathing space this winter.”

The move has been welcomed by support organisation such as Citizens Advice. In September, research by Citizens Advice showed that as a result of the coronavirus pandemic, six million people have fallen behind on at least one bill. Chief executive of Citizens Advice Dame Gillian Guy stated, “This raft of new protections from Ofgem should help more people who are struggling to stay afloat. Energy is an essential service and everyone should be confident they can adequately heat their home and protect their health – especially during a global pandemic. We’ve been pressing for the measures agreed between government and energy suppliers to help people through the coronavirus pandemic to be extended and widened, so we’re very pleased to see this announcement from the regulator.”