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A Regulatory Policy for Self-disconnection: An Examination of the Reasons for and Implications of Pre-payment Meter Stoppages

Description

There has been considerable concern about the degree of hardship undergone by pre-payment meter (PPM) users who experience gas stoppages due to self-disconnection. In the context of competition in energy supply markets fuel poverty has risen up the political agenda to the extent that the energy regulator Ofgem has been asked by the government to ensure equity in the provision of gas and electricity to disadvantaged customers. It has been proposed that energy suppliers should have a code of practice dealing with services to pre-payment meter customers and that further research should take place into selfdisconnection. This study seeks to establish the scale of the pre-payment meter stoppages, the reasons they take place, the implications of this for users, and to identify those who experience hardship. A survey of 200 gas PPM users was undertaken in Coventry using face to face interviews, in peoples' homes. Most households were on low incomes, 36 per cent having incomes of £5000 or less. In addition, 24 per cent were single parent households and in 60 per cent someone was receiving at least one benefit out of income support, job seekers allowance, family credit, invalidity benefit or disability living allowance. It was found that 33 per cent (66 users) have self-disconnected their gas PPMs at some time in the last year. Examining all supply interruptions, the majority (64 per cent) last less than seven hours and the main reason given for the last disconnection was the user being unaware the credit was low. For stoppages of seven hours or more the three main reasons were that the user was waiting for benefits/wages to be paid, the outlet was closed or the gas ran out overnight. Through the course of discussion it was possible to identify a small group of users who felt that they had a problem with the Quantum meter, were experiencing hardship and wished to pay another way. It was possible to draw some practical conclusions for consideration in formulating policy about how such users could be protected from hardship. Nevertheless, amongst the sample as a whole, self-disconnection does not present a significant problem for the vast majority of gas PPM users and most stoppages could not be described as problematic in terms of their length or consequences.