Fair By Design responds to Ofgem consultation on additional debt related costs

Fair By Design published its response to Ofgem's consultation on additional debt related costs on 23 November 2023¹. The organisation said the response advocates eliminating energy payment premiums that disproportionately affect low-income households¹.

Ofgem's consultation aims to inform policy decisions about whether the energy price cap should be adjusted to better deal with energy debt and arrears, which the response puts at £2.6bn¹. Fair By Design said its response was driven by the desire to get rid of premiums that those on low incomes pay because of how they pay for their energy¹.

The response document itself has been published in full by the organisation¹. The consultation sits within the regulation and policy area covering energy pricing and consumer protection.

Why it matters for households

The consultation concerns the energy price cap, which sets the default rates that millions of households on standard variable tariffs pay. Ofgem is considering whether the cap should be adjusted to account for additional debt related costs, and the level of energy debt and arrears is given as £2.6bn¹.

Fair By Design's stated concern is payment premiums: higher costs faced by low-income households arising from how they pay for their energy¹. Its response argues for removing those premiums rather than retaining them within the price cap framework¹.

The outcome of the consultation has not been reported, and no date has been given for a decision or for any change to the price cap. Any effect on household bills would depend on whether Ofgem adjusts the cap and how, which the consultation is intended to inform¹.

What happens next

No next steps, timetable or decision date are set out in the published response¹. The consultation is intended to inform policy decisions on whether to adjust the energy price cap to better deal with energy debt and arrears¹.