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Energy: Billing

Volume 464: debated on Tuesday 16 October 2007

To ask the Secretary of State for Business, Enterprise and Regulatory Reform what assessment he has made of Ofgem's conclusion in its factsheet number 67, Prepayment Meters and Fuel Poverty, that a premium of £106 per year for pre-payment meter customers is more desirable than a premium of £14 for all energy customers. (157404)

Government believe that independently regulated competitive markets are the most cost-effective and efficient way to deliver our energy policy goals. It is for energy suppliers to determine their pricing structure, taking into account the different cost to serve for different customers.

Prepayment meter rates are often higher because of the higher costs of the meters and the payment infrastructure that supports them. Some companies have equalised their prepayment and standard credit tariffs, but others have not. It is true that the differences between the rates paid by direct debit customers and those paid by others (both standard credit and prepayment meter customers) have widened. I am concerned about these increases, and am working with Ofgem to consider ways to encourage further protection of the most vulnerable consumers from the large differences in bills because of the payment method they use and to spread best practice across suppliers.