Recommendation 43

HM Government · verbatim extract Acknowledged

and then resell the electricity to their tenants must comply with Ofgem’s maximum resale price rules. The maximum resale price for electricity is currently set as the same price as that paid by the person reselling it, including any discounts. Under these circumstances, we expect landlords to pass on the discount received to tenants accordingly. Ofgem’s guidance (available here) outlines how to ensure customers are being charged no more than they should when they buy the electricity through their landlord, including what to do if they think there has been a mistake. Landlords with a domestic electricity connection who charge ‘all inclusive’ rent will be obliged, by new legislation, to pass on the Energy Bills Support Scheme payment of £400 spread over six months from October to their tenants who pay all-inclusive bills. The landlord’s fixed charge may already provide their tenant with similar protection from the impact of the energy price increase. Where rental charges are affected by the rising costs of energy, the tenant and landlord would need to consider whether any other restrictions might apply. The Government is working with the Department for Levelling Up, Housing and Communities, along with key stakeholder groups in the private rental sector, to communicate this messaging. We understand the risk of prepayment customers not redeeming their vouchers, which is why the Government is working on a communications campaign targeting people who have traditional prepayment meters with clear information about what they need to do to receive the £400 EBSS discount. We are also working with stakeholders across the energy industry, consumer groups and charities to communicate this information. With regard to customers in debt, where credit is applied to an account, this will contribute to reduced arrears and any agreed debt repayment plan. As set out in the Government’s response to the technical consultation on the EBSS (available here), we expect and encourage suppliers to make it their priority to work actively to move customers with 12 Responses to the Committee’s Third Report of Session 2022–23 large arrears balances onto repayment plans wherever possible. This should be in line with suppliers’ normal business processes in complying with supply licence condition 27, including Ofgem’s Ability to Pay Principles of: a) having appropriate credit management policies and guidelines; b) making proactive contact with customers; c) understanding individual customers’ ability to pay; d) setting repayment rates based on ability to pay; e) ensuring the customer understands the arrangement; f) monitoring arrangements after they have been set up; and g) re-engaging with a customer after an initial occurrence of a failed repayment arrangement. This will help to ensure that, while EBSS will be allowed to contribute to debt and arrears, arrears balances should be minimised, and only an amount affordable for the customer should go towards debt.