Changes to prepayment meter standing charges and other debt costs

Related links

• Levelling the cost of standing charges on prepayment meters
• Levelisation - Selection of Reconciliation Operator
• Levelisation of payment method cost differentials: a call for evidence
• Standing charges – call for input

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This statutory consultation sets out our updated proposals for levelisation, which is the process of adjusting costs between payment methods to make charges more equal or equitable but less cost-reflective. This follows a policy consultation in August 2023.

We are proposing to proceed with:

• A first phase of levelisation of Prepayment Meter (PPM) and Direct Debit (DD) standing charges from April 2024.
• Followed by a second phase of levelisation of debt related costs between Standard Credit (SC) and DD customers. This stage would be implemented no earlier than October 2024.
• Supporting both stages of levelisation with a reconciliation mechanism.

We are also consulting on our proposed Standard Licence Condition modifications and default tariff cap model changes to enable levelisation.

Respond name

Sabreena Juneja

Respond email

priceprotectionpolicy@ofgem.gov.uk

Main document

[Changing standing charges for prepayment meters and debt-related costs across payment methods [PDF, 804.85KB]

](https://www.ofgem.gov.uk/sites/default/files/2023-11/Changing%20standing%20charges%20for%20prepayment%20meters%20and%20debt-related%20costs%20across%20payment%20methods1700666797619.pdf)

Subsidiary documents

[Electricity Notice Standard Licence Conditions November 23 [PDF, 179.96KB]

](https://www.ofgem.gov.uk/sites/default/files/2023-11/Electricity%20Notice_Standard%20Licence%20Conditions_Nov%2023.pdf)

[Gas Notice Standard Licence Conditions November 23 [PDF, 178.30KB]

](https://www.ofgem.gov.uk/sites/default/files/2023-11/Gas%20Notice_Standard%20Licence%20Conditions_Nov%2023.pdf)

[Annex 9 - Levelisation allowance methodology and levelised cap levels [XLSX, 135.30KB]

](https://www.ofgem.gov.uk/sites/default/files/2023-11/Annex%209%20-%20Levelisation%20allowance%20methodology%20and%20levelised%20cap%20levels%20v101700666859579.xlsx)

[Regional Price Cap Levelisation Model [XLSX, 832.56KB]

](https://www.ofgem.gov.uk/sites/default/files/2023-11/Regional%20Price%20Cap%20Levelisation%20Model%20v201700666854520.xlsx)

Response documents

[Non-confidential responses to the Statutory Consultation [ZIP, 3.16MB]

](https://www.ofgem.gov.uk/sites/default/files/2024-02/Non-confidential%20responses%20to%20the%20Statutory%20Consultation.zip)

Related links

• Levelling the cost of standing charges on prepayment meters
• Levelisation - Selection of Reconciliation Operator
• Levelisation of payment method cost differentials: a call for evidence
• Standing charges – call for input

Share the page