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Fuel Utility Company Fixed Tariff Cancellations

Volume 732: debated on Tuesday 2 May 2023

The petition of Adrian Paul,

Declares that energy companies are able to charge new home owners or renters higher prices by automatically placing them on new standard tariffs compared to their previous fixed tariffs; notes that a home owner may only have insufficient funds for just one monthly Direct Debit payment to be kicked off a fixed tariff; further notes that direct debits can be cancelled accidentally and that direct debits can be wrongly cancelled or set up incorrectly, causing further issues.

The petitioners therefore request that the House of Commons urge the Government to work with OFGEM to make sure utility companies are not to be able to end home owners and renters lower fixed tariffs without a two month period of non-payment.

And the petitioners remain, etc.—[Official Report, 21 February 2023; Vol. 728, c. 1P.]


Observations from the Parliamentary Under-Secretary of State for Energy Security and Net Zero (Amanda Solloway):

Energy suppliers are required to offer terms to all domestic customers. However, the setting of energy tariffs is a commercial matter for individual energy suppliers.

Where a customer pays by fixed direct debit, energy suppliers are required to ensure that the amount is based on the best and most current information available, including energy consumption, and are required to explain the basis of how any amount has been determined. Energy suppliers typically review their customers’ direct debit arrangements twice a year, but customers can also contact their supplier at any time to request a review of their direct debit arrangement in line with their estimated annual consumption. A supplier must explain the reasons for any changes it makes to a customer’s direct debit arrangement and normally inform them of any change at least 10 days in advance.

The independent regulator, Ofgem, is required by law to set the energy price cap so that it protects customers of default tariffs from overpaying and allows an efficient supplier to finance its supply activities. All elements of the energy price cap are kept under review and adjustments can be made reflecting changes over time.

The energy price guarantee (EPG) currently supersedes the energy price cap as the main price protection for consumers. The EPG protects customers from increases in energy costs by limiting the amount suppliers can charge per unit of energy used. As announced in the spring Budget, the EPG will be extended at £2,500 for an additional three months to the end of June 2023.