Prepayment meters - the good, bad and the ugly

At this moment in time i'm doing a feature article on these prepayment electricity meters. My research is quite interesting; almost all of the suppliers are charging extra for these meters.

I looked into why this is, and the findings were quite a shock, yet not totally surpriing. According to action groups Energywatch and National Energy Action, the companies are making close to £300m in revenue. Parts of this go to the broker of the deal, e.g. the local shop, and a little goes towards maintenance, but most of this goes to the supplier.

Some blogs I came across suggested that almost half of the meters were being used to help repay their debts.

Allan Asher, the Chief Executive of Energywatch, called the charges 'morally bankrupt'.

Now, not all suppliers do this. EON have confirmed they have an equal rate of charge for both prepayment and direct debit, and Scottish Power are actually cheaper on prepayment card.

What is disappointing is the response by Ofgen, the energy regulator. Their Chief Executive Alistair Buchanan said, in an Ofgen report dated 27/06/2007: "Prepayment meter customers should take advantage of the competitive market if they are to see further falls in their energy bills".

First thing's first. What sort of threat is that to companies potentially scamming their customers? It's not one. It just shows Ofgen to be timid and perhaps even intimidated by these companies. It also suggests a lack of consideration to these customers.

There's more though. Those on prepayment meters can't just up sticks and change company. Most of the time the only way they can change supplier is if they pay to get put back on a normal meter and THEN change company; a fee some people can't afford to pay.

I couldn't rant like this in my work, and I really shouldn't here, but it's a point I could relate to, being on a prepay meter. It's not fair that people should get scammed just because companies got themselves into debt.