Grant Shapps Warns Power Companies Against Raising Customer Bills That Reduce Usage

Business Secretary Grant Shapps has written to energy providers warning them not to overcharge customers who make “enormous efforts” to reduce their consumption.

The cabinet minister said he was “disturbed” by reports that some customers had seen a large increase in direct debit charges despite cutting the amount of gas and electricity.

Mr. Shapps urged utility giants to reflect in their prices what homes actually use, as struggling families struggle to pay bills struggling during the cost of living crisis.

Sharing a letter sent to energy chiefs on Twitter, the business secretary said: “Households shouldn’t see their direct debits rise when their energy use falls.”

Shapps said she’s concerned that some consumers “are saying their direct debits are increasing when they’re going to great lengths to reduce their use to save money at a time when household incomes are down.”

Urging businesses to be “responsive” to changes made by customers, he added: “I’m interested in understanding how you intend to make sure your direct debit system doesn’t overcharge.”

Britain’s energy providers have agreed to abide by the government’s energy price guarantee, which limits how much can be charged per unit of gas or electricity.

Direct debit payment is capped at 34.0p/kWh for electricity and 10.3p/kWh for gas, which should mean average annual household energy costs should be capped at £2,500, until more are made changes in April 2023.

But The times reported last week that some customers have seen their direct debts rise by hundreds of pounds a month, even on fixed-rate power deals where unit prices have not changed.

Regulator Ofgem has been asked to look into the issue to make billing “more responsive” as it found in the summer that some customers had been asked to pay for a level of gas and electricity they were unlikely to use. .

It comes as major providers said customers had cut their energy use by more than 10 percent, as the government prepares to launch a public information campaign on energy efficiency.

Michael Lewis, CEO of E.ON, said The Guardian was “seeing 10 to 15 percent reductions” in recent weeks, while Utility Warehouse owner Telecom Plus said gas use had dropped 10 percent in recent months.

Power bills will soar again next spring after Chancellor Jeremy Hunt said the guaranteed power price would rise on April 1, pushing average annual costs to £2,500 to £3,000.

More than a million young families in England will face fuel shortages by spring, according to End Fuel Poverty Coalition figures shared with the independent.

The number of families with children under five living in energy poverty will rise from 860,000 to 1,050,000 when the changes take effect from April, the coalition of charities estimated.

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