UK asks energy suppliers to pause forced installation of prepayment meters



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Times reports vulnerable people forced to have prepayment meters

Regulator Ofgem asks suppliers to pause such installations

British Gas says it will halt practice this winter

Business minister Shapps calls practice 'outrageous'

Recasts to add Ofgem direction to suppliers

By Sarah Young

LONDON, Feb 2 (Reuters) -British regulator Ofgem has asked energy suppliers to stop using court orders that permit the forced installation of prepayment meters in people's homes after a report in The Times newspaper said the practice was being used against vulnerable people.

Energy regulator Ofgem's CEO Jonathan Brearley said on Thursday he had asked all energy suppliers to review their activities regarding court warrants and prepayment meters (PPMs).

"Suppliers need to reassure us that the processes for customers being moved onto PPMs are compliant with all Ofgem rules and, until this is done, we have asked them to pause forced installations," Brearley said.

British Gas earlier saidit would temporarilystop using such court orders after the Times report found that the Centrica-owned CNA.L firm was engaging in the practice by sending debt collectors who target vulnerable customers.

The court warrants obtained by British Gas canbe used by a contractor to break into the homes of customers who have fallen behind on their bills to install prepayment meters, meaning they could have their heating cut off if they did not pay.

The Times citedinstances of a father with three young children, a woman with mental health problems and a woman with a disabled daughter all being affected.

Britain's business minister Grant Shapps called the forced installations "outrageous" and called on energy companies to suspend the practice.

He earlier said hewas "horrified" by the report and the government would hold meetings with Centrica to address the "systemic failure".

Brearley said Ofgem was opening a comprehensive investigation into British Gas and would not hesitate to take the strongest action needed.

"It is astonishing for any supplier not to know about their own contractors’ behaviour, especially where they are interacting with the most vulnerable in our society," he said.

BILLS SOAR

Energy prices in Britain have rocketed this winter and despite a government support package some people are still unable to afford to heat their homes.

A typical household bill is now 2,500 pounds ($3,100) a year with government help, more than double what it was last winter.

Centrica said in a statement it would suspend the installation of prepayment meters by court warrant until the end of winter following the Times report.

The group's chief executive Chris O'Shea told BBC Radio that he was "very disappointed" and he felt very let down by a contractor whose behaviour he called "unacceptable".

The company has commissioned an independent report into the Times' findings.

O'Shea said government and industry needed to address the problem of high energy bills and seek a long-term solution as it was not responsible for customers just to rack up debt.

About 1.2 million of British Gas' 7.5 million customers use prepayment meters, O'Shea said. About 20,000 customers have in the past year had meters installed under warrant, which he said was in line with the industry rate.


($1 = 0.8092 pounds)



Reporting by Sarah Young and Sachin Ravikumar; editing by Michael Holden, Hugh Lawson and Chizu Nomiyama

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