Prepayment meter charges

Powergen, Scottish Power and npower have been criticised by a group of MPs for back-charging nearly 750,000 customers with prepayment token meters when they ‘underpaid’ after prices went up.

Karen Darby, CEO of SimplySwitch.com comments: “This problem only exists because prepayment meters are old fashioned and outdated. When tariffs change, prepayment meters have to be updated manually with the new prices, which takes time. As prices rose several times last year, customers were left paying the old unit rates until their meters had been reset.”

A prepayment household in Manchester with British Gas for gas and Powergen for electricity would currently pay £635 a year for their gas and £400 a year for their electricity – a total of £1035.

By switching to a credit meter and paying by monthly direct debit, their energy bill would drop to £900 – a saving of £135 a year. Having a credit meter also leaves you free to switch suppliers. If this same household switched to the best available deal, they could net a total saving of £293.

Darby concluded: “The most vulnerable households tend to have prepayment meters and they pay a premium for their energy. Customers should not be penalised as it’s the suppliers’ fault if they are slow to re-set meters.

“Whilst Powergen has said that it will replace 190,000 token meters with ‘key’ meters which can be changed quickly when there is a tariff change, we urge consumers to take the lead and ask their energy supplier to change their meter from a prepayment meter to a standard credit meter. This will not only mean lower bills, but will also leave you free to switch to the best deal available.”