We will all be paying energy firms £1.3bn in annual charges to help them recover bad debt from April 1, 2024.
Despite billions of pounds in profits, the firms will bill each of us an average of £28 a year extra to pay for the cost of recovering bad debts.
And a new report by the Warm This Winter (WTW) campaign also casts doubt on the effectiveness of the charges in actually offsetting customers’ debt and helping those struggling with their bills.
Energy firms were already able to charge £842m a year on bills for bad debt administration.
The industry regulator Ofgem has now ruled they can charge an extra £735m, on average £28 per household per year.
WTW, members of the End Fuel Poverty Coalition, along with the National Pensioners’ Convention, say the combined impact of those charges varies depending on the bill type with prepayment customers paying £25.17 per household per year.
Direct debit customers pay £38.96, while standard credit customers are hit the hardest paying £129.71.
The report says it is unclear if the extra payments will help reduce the accounts of struggling customers, or if they will be written off on supplier income statements while the remaining debt is sold to debt collection agencies.
New polling from Opinium reports that over 55 per cent of the public oppose the extra £28 per household being spent on debt administration.
NPC’s Jan Shortt said: “As always, it is the customer that pays, not the shareholders or energy industry who are currency making the biggest profits for years.
“Sustainable and affordable energy sources are a must and the regulator should consider how it can protect customers from this unacceptable level of levy when everyone is still struggling with high energy bills.”
If these charges apply from April 1, it’s certainly no joke and no April Fool.
It’s plainly kicking people when they are down.
Rodney Sadd
Supporter of the NPC
Crowland
