Decision of the Gas and Electricity Markets Authority to close its compliance engagement with Bulb on the requirements of Standard Licence Condition 27 of its gas and electricity supply licences

Publication date
25th July 2018
Information types
Policy areas

All suppliers are obligated to be in a position to offer pre-payment meters to customers in payment difficulties, for example for debt-repayment purposes. This is covered by Standard Licence Conditions 27.5 – 27.6 of the gas and electricity supply licences.

Suppliers with over 50,000 customers are further required to openly offer pre-payment meters to customers through the obligation to “provide customers with a wide choice of payment options” as detailed under Standard Licence Condition 27.1 of the gas and electricity supply licences. Failure to do so can result in detriment to the consumer through not being able to pay for energy in a way that works for them, potentially causing payment difficulties and accrual of debt.

Offering pre-payment meters as a method of payment for all customers became a mandatory requirement for Bulb under Standard Licence Condition 27.1 in May 2017.

Ofgem became aware that Bulb were not offering pre-payment meters as a payment option in March 2018 and promptly engaged with the supplier. Bulb provided Ofgem with a detailed action plan of the steps it was taking to implement pre-payment meters as a payment option. Bulb’s action plan included: changes Bulb were making to its systems & literature; details of its staff training; communications plan; and, key milestone delivery dates.

Bulb had started planning the implementation of pre-payment meters as early as March 2017 in anticipation of reaching the 50,000 customer threshold. Setting up the necessary infrastructure and systems to facilitate pre-payment meters took longer than planned. During this period, the acquisition of new customers also progressed faster than expected. Although Bulb did conduct a trial of the roll-out of pre-payment meters to a small group of customers in December 2017, by the time the trial took place it should have already been in a position to offer pre-payment meters to all its customers.

Bulb provided appropriate evidence to Ofgem that only a small proportion of its customers had enquired about pre-payment meters as a method of payment and that these customers were included in their pre-payment trial phases. Bulb showed that 2 customers who had experienced payment difficulties had requested to pay through pre-payment meters, these customers were offered an alternative method of payment. In addition, Bulb had received 10 complaints from prospective customers in relation to not offering pre-payment meters.

Bulb’s response to our compliance engagement included how it intended to contact both its current customers who had enquired about paying through a pre-payment meter, and prospective customers who had previously enquired about switching to Bulb with a pre-payment meter.

As of April 2018 Bulb were able to offer pre-payment meters to all their existing and prospective customers. Due to Bulb’s open engagement with Ofgem in detailing the steps it took to become compliant and how it proactively contacted the customers affected by this failure, Ofgem has decided to close its compliance engagement without taking further action beyond the assurances and actions already provided by the supplier.

Key lessons learned:

  • All suppliers must be able to offer pre-payment meters as an option to customers in payment difficulty regardless of their number of customers.
  •  We expect suppliers to openly offer a pre-payment payment option to customers as soon as they exceed 50 000 customers.
  • We expect suppliers to plan in advance to be able to offer this option to all customers once they exceed 50 000 customers, through controlling their customer acquisition and making the necessary arrangements to put pre-payment meters on the wall for those customers who request a pre-payment meter.