To launch a prepayment gas tariff, a supplier must first purchase a ‘slot’ from Siemens, which manages the gas prepayment system. The number of slots available is limited, and dominated by the big six energy suppliers. In a written response to the potential remedies set out by the CMA for prepayment meter (PPM) customers, Citizens Advice claims that several suppliers have complained to Ofgem about their inability to obtain new slots and launch new gas tariffs for traditional PPM’s.
The response says the issue has delayed or constrained some suppliers’ plans to compete in the prepay market which is “unacceptable in a market which predominantly serves more vulnerable households”.
Citizens Advice said: “Given the profile of PPM customers, who tend to be more vulnerable on average, and the current lack of acquisition tariffs in the market, we remain concerned that the gas tariff slot issue is not being tackled with greater urgency.”
Ofgem is conducting a review of the tariff slots situation and expects to consider possible solutions by the end of 2016. Citizens Advice argues that this time frame is disappointing in a market that “already suffers from weak competition”.
“We would like to have seen greater efforts made to identify any interim solutions,” Citizens Advice says.
“Suppliers holding on to tariff slots could be told to either use them or lose them until such time as Siemens could upgrade its system and their slots could be returned to them.
“This could have meant more competitive PPM tariffs becoming available in Autumn/Winter 2015-16, which would have helped households.”