Electricity consumers' debts require tariff hikes in the UK

The UK government is considering raising electricity tariffs to cover record consumer bill debts, the country's energy market regulator, Ofgem, has said. The total debt for energy supply has exceeded 2.6 billion pounds ($3.18 billion).

When considering a tariff increase, Ofgem is considering a temporary increase in consumer bills of up to 17 pounds per year, or about 1.5 pounds per month.

The regulator argues that raising prices is the best option for the time being to avoid higher costs and a deterioration in service quality if suppliers make losses or close. An example of this was the energy crisis of 2021, when more than 30 suppliers ceased operations.

On the other hand, the consumer organization End Fuel Poverty Coalition has criticized the tariff increase. Experts point to electricity suppliers' profits of more than 2 billion pounds during the first half of 2023, despite consumer debts.

Instead of raising prices, experts believe that the government should work with energy companies to develop a mechanism to help households repay their debts.

Ofgem is expected to complete its consultations on price increases and announce its decision on November 2. If it is positive, the new tariffs will come into effect in April 2024.