Utility Company Debt

MultiFuelBurner

What has to be included is that the energy suppliers were left toothless to recover bad debt as they were not allowed to force fit pre payment meters. 

What you can't do is restrict their profits to 1.9-2.1% then take away all the tools for debt recovery and not expect them to ask for help.

Consequences of being too light touch on those in energy debt.

malcsaunders

MacPingu1986 said:

malcsaunders said:

Does point 8) above mean that the energy suppliers would already have factored in bad debt?

No, I explained this in my previous two posts but as a recap:

In the business of energy supply the SVT price cap limits suppliers ability to factor bad debt into their pricing.

Secondly, further OFGEM restrictions on installing prepayment meters make it much harder to recover bad debt so bad debt costs have increased. Remember again that energy suppliers can't particularly choose their SVT/deemed customers and they can't disconnect them if they don't pay. So if you can't install a prepayment meter there are very few other actions available to suppliers to recover the debt.

May I ask by how much does the SVT price cap limit the suppliers ability to factor in bad debt into their pricing?

MattMattMattUK

malcsaunders said:

MacPingu1986 said:

malcsaunders said:

Does point 8) above mean that the energy suppliers would already have factored in bad debt?

No, I explained this in my previous two posts but as a recap:

In the business of energy supply the SVT price cap limits suppliers ability to factor bad debt into their pricing.

Secondly, further OFGEM restrictions on installing prepayment meters make it much harder to recover bad debt so bad debt costs have increased. Remember again that energy suppliers can't particularly choose their SVT/deemed customers and they can't disconnect them if they don't pay. So if you can't install a prepayment meter there are very few other actions available to suppliers to recover the debt.

May I ask by how much does the SVT price cap limit the suppliers ability to factor in bad debt into their pricing?

Suppliers would in an open market increase their price to remain profitable whilst facing bad debt, in a normal business they would also recover that debt far more effectively. Suppliers are blocked from taking effective debt recovery by Ofgem rules and the price that they can sell their product is limited by the price cap.