The UK Office of Gas and Electricity Markets (Ofgem) has proposed reforms to address household energy debts, which have surged to £4bn ($5.1bn).
The regulator suggests changes such as introducing tariffs without standing charges and standardizing how suppliers assess customers’ payment abilities.
Energy debts have risen by 91% since 2022, reaching £3.82bn ($4.87bn) by September 2024. Despite reductions in energy bills under Ofgem’s price cap since the energy crisis triggered by Russia’s invasion of Ukraine, prices remain 40% above pre-crisis levels, straining vulnerable households.
Ofgem’s director general of markets, Tim Jarvis, emphasized the importance of consistent support for struggling households and providing practical solutions for those in financial difficulty. He noted that offering tariffs with zero standing charges would empower consumers to choose options best suited to their needs.
The regulator plans to consult on these changes and aims to implement standing charge-free tariffs by next winter.
In addition, Ofgem has introduced the Advanced Procurement Mechanism (APM), an investment fund worth £5bn–£8bn ($6.3bn–$10.2bn), to expedite the UK’s transition to net zero by allowing early procurement of essential components for energy transmission projects.