Consumer Scotland responds to Ofgem consultation on energy debt at change of tenancy

Consumer Scotland has published its response to an Ofgem consultation on energy debt at change of tenancy, tentatively supporting reform while warning about self-disconnection and pre-move liability risks.

Consumer Scotland has published its response to an Ofgem consultation on tackling energy debt that arises when consumers move house, dated 21 January 20261. The statutory body for consumers in Scotland, established by the Consumer Scotland Act 2020 and accountable to the Scottish Parliament, said it "tentatively support[s] Ofgem's early thinking" on reforming the change of tenancy process, given the proportion of overall debt that arises where there has been a change in housing occupant1.

The response warns that the changes under consideration are substantial and will "fundamentally alter the home move process for consumers"1. Consumer Scotland said suppliers must have quick, efficient and simple processes allowing a homemover to set up a new account and change payment method within minutes, and that if consumers face lengthy waits the policy "will be a failure" and expose them to "unacceptable risks of self-disconnection"1. It said it cannot assume every household will be able to contact a supplier as soon as they move in, and that "a week or two of credit should be the minimum expectation"1.

On liability, Consumer Scotland said rented accommodation commonly has a gap between one resident moving out and the next moving in, during which the landlord or letting agent is responsible for supply1. It said this interim period could be days, weeks or months, and that without two separate notifications to the supplier there is a risk tenants become liable for energy bills incurred before their tenancy began, or that nominal credit on the account is used by the landlord before the new tenant moves in1. It also raised the case of a tenant moving in before the landlord has told the supplier of a change of tenancy, which could lead to a credit-metered supply being switched to prepayment without notice1.

The response questions one element of the proposals directly:

"We are unclear of the rationale for Ofgem's suggestion to apply a zero standing charge tariff by default where there has been a change of tenancy."
Consumer Scotland, Ofgem consultation on tackling energy debt when consumers move house1

Consumer Scotland recommended that any changes be set out in standard licence conditions and associated guidance, noting that SLC 7 already sets out related obligations for licensees1. It said that where suppliers fail to deliver there should be "harsh and immediate penalties", which could take the form of a Guaranteed Standard of Performance payment as well as Ofgem enforcement action1. It also called for a broad consumer awareness campaign if the proposals are taken forward, and for individual communications waiting for a new occupant when they move in1.

The response cites research from health charities that a terminally ill person's energy bills can rise by 75% after diagnosis, and a case study putting the additional average estimated monthly cost, before heating and typical electricity costs, at more than £2701. It notes that Ofgem reports smart prepay customers tend on average to be the most satisfied cohort of consumers1. On vulnerability, it says support is not universally provided by all suppliers and requires a landlord to be aware of a tenant's vulnerability and to disclose it in a timely manner1.

Why it matters for households

The proposals concern what happens to an energy account when a property changes occupant, and who is responsible for supply and any debt in the gap between tenants. For renters, the response identifies a risk that a tenant could be billed for energy used before their tenancy started, or that credit on an account could be used up by a landlord before they move in1. It also flags that a tenant could be moved onto prepayment without notice if a landlord notifies the supplier after the tenant has moved in, which it says could pose a risk of self-disconnection for consumers with essential medical equipment1.

Consumer Scotland notes that Scotland's housing and tenancy laws and procedures differ from the rest of Great Britain and will affect how any change of tenancy rules work in practice1. It recommends that Ofgem test its proposals against a range of consumer archetypes and scenarios, including difficult cases and groups for whom self-disconnection is high risk or high impact, rather than only "happy path" scenarios1.

What happens next

The response is Consumer Scotland's reply to Ofgem's consultation. No date for Ofgem's decision or for any implementation has been reported1. Consumer Scotland said it would welcome further discussion with Ofgem and would be happy to contribute to the design of effective processes1.

Sources1 cited
  1. Ofgem consultation on tackling energy debt when consumers move house (HTML) | Consumer Scotland consumer.scot