ERA DISCONNECTION ‘SAFETY NET’ PROTOCOL HERALDED A SUCCESS BY REGULATOR

25 January 2008

The Energy Retail Association (ERA) has welcomed today’s report by the Office of Gas and Electricity Markets (Ofgem), Debt and Disconnection Best Practice Review.

The report shows a reduction in the number of households disconnected since 2003 from 17,000 to just 5,000. This is an excellent example of how energy companies are able to voluntarily self-regulate for the benefit of consumers.

The report is a reflection of the success of the ERA’s disconnection ‘safety net’ protocol introduced in 2004 to provide new guidelines on best practice for debt and disconnection. The disconnection safety net has meant that no vulnerable customer has been knowingly disconnected since 2004, even if they were unable to pay their energy bill. All energy suppliers adhere to the guidelines and continue to trial proactive ways to recover debt and help consumers manage household expenditure.

The ERA is currently working with suppliers to review and make further improvements to the ‘safety net’ procedures.

Duncan Sedgwick, Chief Executive of the Energy Retail Association said:

“Disconnection is only ever used as a last resort for customers who have not responded to communication from their energy supplier. The number of disconnections is still low, affecting only 1 in 1,000 customers’ meters.

“Before a customer is disconnected from gas or electricity their energy suppliers will attempt to contact them a number of times via letter, telephone and by visiting the property. Customers who cannot pay their bill will be offered alternative payment methods including pre payment metering and it is only if all attempts to contact the customer and fit a pre payment meter have failed that disconnections are carried out.

“Ofgem’s statistics reflect a pattern of rising consumer debt. Energy suppliers have responded to this with an increasing focus on debt issues which include a range of schemes to help customers manage their debt. Energy Suppliers have put in place a safety net for vulnerable customers, which has meant that no vulnerable customer has been knowingly disconnected from gas or electricity since 2004 even if they were unable to pay their bill.

“Disconnection is not in the interest of either the consumer or the supplier and I would urge any customer who is worried about their energy bills to contact their supplier and ask for the help available.”

Ends

For further information please contact:

• Clare Gibson, Press Officer on 0207 747 5432 or 07983 469766
• Russell Hamblin-Boone, Director of Corporate Affairs on 0207 930 9177 or 07810 374 110