Suppliers will no longer be allowed to back bill customers for energy used more than 12 months ago, under proposals issued by Ofgem partly as a result of case studies from Citizens Advice illustrating that not all suppliers have appropriate back billing protections in place.

Back bills mainly arise when suppliers use estimated bills until they take a meter reading that may show higher consumption than expected. A ‘catch-up’ bill can then be issued to recover the difference – which may be for a large amount.

In 2007, the energy market comprised 11 suppliers, who signed a voluntary commitment not to bill domestic consumers for energy used more than 12 months previously, if the supplier was at fault. There are more 50 suppliers in today’s market and Ofgem is no longer sure that the voluntary commitment is effective for all consumers.

‘Open letter – notifying of our intention to launch a project to protect consumers from back billing’ * features a proposal for a new enforceable rule that is expected to go live this winter to ensure domestic and microbusiness consumers have the same protection against back billing.

Ofgem is also considering whether to introduce a shorter time limit on back billing as smart meters, which allow suppliers to obtain meter reading remotely, are rolled out.

* Initial views may be sent to Ofgem by 28 April.