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People who have prepay energy meters installed pay more than those who pay their bills by direct debit. This is unfortunate, as most people who use prepay meters are on low incomes. No-one uses the things by choice, as not only do they cost more but the maximum amount they can be topped up with at any one time is £20. At a time when prices are going up rapidly, £20 will buy you less and less energy, meaning that it is likely that you will be caught out by frequent power cuts in your home. You will therefore find yourself setting out at inconvenient times to the increasingly scarce shops near you that provide fuel top-up services—provided, of course, that you’re not one of those infirm “elderly” we keep hearing about. Anyone ever tells you that capitalism is “the most efficient system of delivering goods and services”, knock them out and take the time to carve this paragraph into their buttocks.

Many people would dearly love to come off the inconvenient, expensive and humiliating prepay system and switch to direct debit but they can’t, as energy companies—like water companies—say that once one of their meters has been installed, it cannot be removed. The companies themselves are under no illusion about what metering means; meters can be installed after repeated failure to pay, as a punitive measure.

The government have been making noises recently about making the energy companies pay back some of the huge mark-ups they’ve been making off their captive “customers”. Even if some of that money gets repaid, though, there are ever fewer shops that are prepared to top up the prepay key or card, as it clearly isn’t worth the retailers’ while to do so. Long walks in the bitter depths of winter to find someone who will let you heat your home? How excitingly feudal.

Incidentally, there’s a good reason why the meters are more expensive than other methods of payment. As energy minister Malcolm Wicks said last October:
… pre-payment tariffs are not low, but installing and maintaining pre-payment meters is itself not a cheap exercise. An average credit meter costs £10 or less, but a pre-payment meter costs between £50 and £80 and requires a complex payment and support infrastructure involving suppliers, meter owners and thousands of retail outlets…

The difficulty is that the cost of any reduction in pre-payment meter prices forced on suppliers by the Government or the regulator might not simply be borne with a smile by companies and their shareholders. Like other costs, it would probably be passed on to the customer, and therefore not only better-off customers, but the poorest customers who are not on pre-payment meters, would pay more. The worry is that the poor would be subsidised by some of the very poor, and so on. [Hansard]
So the complicated, expensive system that makes life difficult for poor people is expensive because it’s complicated. And if we tried to redress that, the companies that came up with the complicated, expensive system would make life difficult for other poor people. (Also, we have to pretend that it makes any sense for shareholders to be part of the equation.)

In other words, we all just have to accept that the utility companies will screw the poor no matter what. I forget exactly why this is acceptable—but presumably it must be, or by now we would have done something about it.


( 4 comments — Leave a comment )
Oct. 6th, 2008 01:36 pm (UTC)
"once one of their meters has been installed, it cannot be removed"

That isn't true though, is it? There are waiting periods & credit checks and that sort of thing, but isn't impossible. Unless things have changed recently?
Oct. 6th, 2008 01:42 pm (UTC)
Oh, you mean for the people who originally got them installed. Brain not working right today.
Oct. 6th, 2008 01:56 pm (UTC)
You know my thoughts on the matter.
Water meters seem to be a problem to remove, which is why the presence of one can affect the value of your property if you have a family house rather than a flat. What annoys me is that without a meter, water is billed according to the rateable value of your home, not the number of people living there, or how many bedrooms you have. So, a small 2 bedroom flat in London pays as much as a 4 bedroom house filled with 2 adults and 4 kids in Wiltshire.
(Deleted comment)
Oct. 6th, 2008 03:24 pm (UTC)
Now this might be an acceptable antidote to energy meters. How did it break, exactly?
( 4 comments — Leave a comment )

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