Britain’s energy regulator on Monday proposed new measures to protect consumers’ money and prevent energy suppliers from charging high direct debit payments, a move that comes as households struggle to meet soaring energy bills.
Regulator Ofgem said its measures were aimed at reducing the risk of more electricity and gas suppliers going bust, as well as preventing a repeat of the crisis of last autumn and winter.
More than 25 suppliers collapsed last year, squeezed by record-high wholesale energy prices.
The UK government earlier this month asked energy network operators to implement new measures to handle severe weather events better, after a review of the industry’s response to Storm Arwen in November 2021.
The changes proposed on Monday included limits on payments billed via direct debit, to “ensure credit balances do not become excessive,” Ofgem said.
The proposed package also included rules to protect the money of users when a company fails and customers are moved to a new supplier with credit balances, ensuring households do not have to pick up the bill.
“Today’s proposals will make sure that customers’ hard-earned money is properly protected so that a company must foot the bill if it fails, rather than consumers picking up the tab,” Jonathan Brearley, chief executive of Ofgem, said in a statement.
Household energy bills in Britain look set to surge by another 40% in October, Ofgem warned last month, deepening a cost-of-living crisis that is piling pressure on the government to do more to help the poorest. (Reporting by Nishit Jogi and Akriti Sharma in Bengaluru; Editing by Nick Zieminski and Subhranshu Sahu)