Spark Energy said in its submission to Ofgem that it needs an additional tariff as the high operational costs of prepayment meters would make it uneconomic at the price of its standard tariff.
Its Affordable Housing Prepayment Tariffs are specifically designed for low energy users such as low-consuming prepayment customers living in affordable social housing.
Spark Energy said the tariff would be the UK’s cheapest prepayment tariff, offering dual electricity and gas supply for as little as £2 a day.
Ofgem said on granting the request: “We consider that the proposed scheme does not undermine the objectives of the RMR and would be beneficial to eligible consumers.”
Spark Energy chief executive Chris Gauld said: “People in social housing are on the lowest incomes, use prepayment far more and so find it harder to actively engage in the market to find cheaper deals. Those in the affordable social housing sector are uniquely disadvantaged in the market.
“I’m pleased that our team and those at Ofgem have shown the flexibility and willing to achieve this derogation which provides something different and better for tenants.
“By creating this tariff we are addressing the issues that uniquely affect millions of homes, and by meeting the concerns of social housing providers we are helping them become actively involved in getting social tenants a better deal.”
Spark Energy is the latest supplier to be granted derogation from the four tariff cap that was a central element of RMR when it was introduced in 2010.
The cap was designed to simplify the energy market for customers, but Ofgem has already granted seven exceptions to the rule since it was introduced, in order to “not to stifle beneficial innovation”.
However the rule has been widely slammed for restricting competition and an Utility Week analysis revealed that the cap may be scrapped in the future altogether.