Britain's energy regulator, Ofgem, has announced proposed reforms to address how energy companies manage customers with outstanding debts, suggesting the introduction of tariffs exempt

from standing charges. This comes as household energy debts in the UK have reached nearly £4 billion ($5.1 billion).

The Labour government has committed to improving living standards across all regions of the United Kingdom by the end of the current parliamentary term, which could extend until 2029. It has also pledged to reduce domestic energy costs, a pressing issue for many households.

Despite a decrease in home energy bills under Ofgem’s price cap since the peak following Russia’s 2022 invasion of Ukraine, prices remain around 40% higher than pre-crisis levels. This has left energy costs unaffordable for many vulnerable households. According to Ofgem, energy debts have surged by 91% over the past two years, reaching £3.82 billion as of September.

Tim Jarvis, Ofgem’s director general of markets, stated that the regulator is "setting out plans to increase and standardize the support available to people struggling with energy debt, as well as exploring practical help for households in severe difficulty." Proposed measures include making suppliers adopt consistent methods for assessing customers' ability to pay and enhancing the support provided to those in need.

Ofgem is also pushing for the introduction of tariffs that do not include standing charges. These charges, a fixed daily fee added to the unit price of gas and electricity, cover the costs of maintaining a household’s connection to the energy system. However, consumer advocacy groups argue they are unfair, as they apply regardless of energy usage.

"We want to give consumers the ability to make the choice that’s right for them," Jarvis explained. "By offering a zero-standing-charge tariff, we would create that choice for everyone."

Ofgem plans to consult on the proposed changes and aims to have standing charge-free tariffs available by next winter. Photo by Jennifer Luther Thomas, Wikimedia commons.