Ofgem consults on managing network charge bad debt arising from COVID-19

The Network Charge Deferral scheme is expected to help minimise disruption to customers and other market participants by assisting suppliers and shippers who face cash-flow issues

Ofgem is consulting on proposals enabling networks to recover bad debts arising from COVID-19 related deferred network charge payments and introduce an enduring solution to bad debt recovery.

The Network Charge Deferral (NCD) scheme, run by the Energy Networks Association (ENA), is expected to help minimise disruption to customers and other market participants by assisting suppliers and shippers who face cash-flow issues due to the unprecedented public health crisis triggered by COVID-19.

The regulator considered three options that would allow licensees to recover NCD-related bad debt in 2021/22: miscellaneous pass through term, eligible bad debt pass through term and bad debt term.

Ofgem said it discussed these options with energy network companies and is now seeking wider views on applying the third option to the sector.

It believes this will enable the effective recovery of bad debts arising as a result of this scheme and would allow for the recovery of other bad debts incurred due to non-payment of network charges.

The deadline for responses is 4th September 2020.

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