UK households could see energy bills rise by £75 to cover debts of other customers
The total energy debt could top £7billion next year
British households could see their energy bills climb by £75 to cover unpaid debts from other customers, a report has warned.
Listen to this article
The supplier EDF has described the situation as "out of control" with outstanding payments projected to hit £7billion next year.
Energy regulator Ofgem currently allows suppliers to raise customers' bills to cover those who have struggled to keep up with payments.
A report by the supplier, which has over five million customers, warned that payments could be raised by around £60, but this could rise to between £70 and £75 next year.
It said: "Debt-related costs today add around £60 to the typical annual energy bill.
"Industry experts have estimated that debt reaching £7bn this year would require a further £10 to £15 per year to be added, driving up energy bills further and pushing more households into debt."
It comes as Ofgem is set to unveil its latest energy price cap on Wednesday, which limits how much suppliers can charge for each unit of gas and electricity.
The regulator will reveal the level of the annual energy price cap for July to September for a typical dual fuel household across England, Scotland and Wales.
Analysts Cornwall Insight predicted last week the cap will rise by £209 a year to £1,850 from July 1 – an increase of 13% on April’s £1,641 annual cap.
It sets a maximum price per unit of gas and electricity used, meaning households only pay for the amount of energy they use.
This means households will be largely shielded over the warm summer months, but concerns are growing over a painful hit when the cap is reviewed in October and energy demand rises as temperatures drop.
The report also raised concern around the number of customers "who were reliably paying for their energy using a prepayment meter who then switched to paying on receipt of a bill, who have subsequently stopped paying despite no identified change in their ability to pay."