Homeowners across Britain face the prospect of paying an additional £75 to cover unpaid energy debts, a new report has revealed.
Rising Energy Debt
Energy supplier EDF has cautioned that customers struggling with debt have contributed to mounting energy arrears, with the total expected to exceed £7 billion next year. This increase means that paying customers could see their bills rise by up to £75.
Regulator Ofgem permits energy companies to increase bills for paying customers to offset those who have found it difficult to maintain payments. The major supplier, which serves more than five million customers, indicated this currently adds approximately £60 to the bills of paying households. However, this figure is projected to climb to between £70 and £75 next year.
EDF Report Highlights
In its report, the company stated: "Industry experts have estimated that debt reaching £7bn this year would require a further £10-£15 per year to be added to energy bills, driving up energy bills further and pushing more households into debt."
The report also highlighted concerns regarding the number of consumers who were reliably paying for their energy using a prepayment meter who then switched to paying on receipt of a bill, and have subsequently stopped paying despite no identified change in their ability to pay.
Upcoming Ofgem Announcement
This development comes ahead of Ofgem's announcement of its latest energy price cap tomorrow, Wednesday, May 26. The price cap, which restricts the amount suppliers can charge per unit of gas and electricity, is predicted by experts to potentially increase to the equivalent of £1,850 annually for a typical household. Analysts at Cornwall Insight attributed the upward revision in their forecast primarily to surging wholesale prices, which rose steeply in February and March following US and Israeli missile strikes on Iran.
